Exactly. The interest covers the cost of capital, delinquencies, administration, but it's the merchant fees that are paying the rewards. Before Dodd-Frank and

Exactly. The interest covers the cost of capital, delinquencies, administration, but it's the merchant fees that are paying the rewards. Before Dodd-Frank and the regulation of debit card interchange fees, many debit cards were also offering lucrative rewards, despite there being no interest at all. With debit cards now limited to $0.20 + 0.05%, those debit rewards cards are gone.