A bit tangential to your point, but... banks generally don't eat losses due to common credit card fraud (a stolen/cloned card number being misused). When you ca

A bit tangential to your point, but... banks generally don't eat losses due to common credit card fraud (a stolen/cloned card number being misused). When you call your bank and say that some charges on your card were unauthorized, and they give you back that money, it immediately comes out of the bank accounts of the stores that made the charges. They are paying for the reversals, not the card issuer. Each of those stores also pays a significant chargeback fee, which more than covers the cost of that customer support agent that took the call, and reissuing the physical card if necessary. Plus, much of the transaction fee goes to paying out rewards to card holders and to the processing networks that make everything work (e.g. VisaNet), rather than to the banks' profits. That reflects the fact that the banks generally don't have significant fraud losses to cover. The cost to banks from reissuing cards after massive data breaches at major retailers is a relatively new phenomenon and isn't priced into those fees.