One may think how anyone can make a profit by issuing credit cards. Lending money to people up front, so they can buy what they want to with it, then 30 days to pay it back without interest. But the contradiction is with a market valuation of about $133 billion and profit margins at 42%, Visa has proven that extending credit to consumers and assuming they'll be irresponsible is as gainful an industry as any. The process involved in the Visa model is: Bank X distributes its Bank X Visa cards to accountholders, who now have the convenience of not having to carry wads of bills for every commercial transaction. Now the banks start charging 14% or 19% or 24% interest which keeps adding to its total revenue. Visa, in the form which it is today would not have existed if people bought only what they could afford and saved for their large purchases. If you pay your Visa bill entirety every month, it costs your financial institution to accommodate you. They'll lose money on the deal. On the other side if you incur a balance and add to it with each pay period, you'll be contributing to a scenario whereby Visa's stock price has not only tripled over the past three years, but remains well shy of an ambitious one-year target estimate. Read more at: : http://www.investopedia.com/articles/markets/080714/how-visa-counts-your-credit-card-balance.asp