Contrary to the common perception of users paying off balances monthly ("transactors"), the majority—about 60%—are "revolvers" who carry debt. This group is the primary source of profit for card issuers, as they are subject to interest rates now averaging a staggering 23%.

Major retailers use third-party program managers for their gift cards. When a customer is scammed, the retailer deflects responsibility, stating they don't issue the cards. This structure, combined with weak regulation, leaves fraud victims with little recourse, creating an "accountability sink."

Despite a 9.1% year-over-year increase in nominal sales, Black Friday data reveals consumers bought 4.1% fewer items and dramatically increased their use of "Buy Now, Pay Later" services. This indicates that inflation, not strong consumer health, is driving top-line revenue growth for corporations.

Companies profit not just from the initial sale (cash up front) and unredeemed balances. A third, often overlooked, profit source is consumer overspending. Shoppers typically spend 30-40% more than the card's value to use the remaining balance, a phenomenon called "top-off tension."

The payment card market has a stable, recurring revenue base. Of the 4 billion new cards issued annually, most are replacements for expired or lost/stolen cards, not net new accounts. This provides a durable, predictable demand floor for manufacturers like Composecure, independent of new customer growth.

For high-end brands hesitant to offer discounts, Apple's model is ideal. They sell products at full price but include a substantial gift card for future purchases. This drives sales and encourages repeat business without ever putting the core product "on sale," thus preserving brand prestige.

A surprisingly large portion of high credit card APRs covers operating expenses, particularly marketing. Issuers like Amex and Capital One spend billions annually on customer acquisition. This spending is passed directly to consumers, as higher marketing budgets correlate with higher chargeable rates.

Unlike debit cards protected by Regulation E, gift cards are intentionally exempted from strong consumer protection laws. This carve-out, lobbied for by retailers to ease commerce, removes the legal requirement for financial institutions to investigate fraud and reimburse victims, shifting the entire loss to the consumer.

Early-stage businesses can strategically leverage the 30-day interest-free period on credit cards as working capital. By ensuring customer acquisition costs are recouped within that window, your credit limit effectively becomes your advertising budget without incurring interest or debt.