This article is actually really interesting and has non-obvious findings. The tl;dr is that it's not mostly due to defaults or for rewards programs. But rathe

This article is actually really interesting and has non-obvious findings. The tl;dr is that it's not mostly due to defaults or for rewards programs. But rather due to very high operating expenses (4-5% of dollar balances!) driven by marketing. And also because the lending banks can't diversify. The risk of default is essentially magnified because you can't do anything if the economy turns bad and everybody starts defaulting together at the same time.