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Because Discover makes far more than that on people who owe them credit and don't pay it off immediately, so it's in their interest to get more people to owe them credit in hopes that they'll keep a running balance.

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Credit cards charge merchants for their loyalty programs. They do make money from carried balances, but that's not how reward programs are funded.

Regardless, the point is that credit cards make money off of each transaction, even if the consumer doesn't see a per-transaction fee.

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