[CRFSaver]

The credit card companies still benefit even if you pay off your balances at the end of the month. The interchange that gets charged is where they make it. In fact the CC industry is moving towards transacters versus revolvers in the long run. And Visa and Mastercard are even raising the interchange rate charged to merchants for their "Signature" cards. Some (not all) of the CC companies are starting to make changes to the way they do business by limiting fees and maintaining fixed rates longer. There are still many that do sleezy business though which is unfortunate.

Part of the reason CC companies change rates is that they are not like a traditional fixed rate loan (Mortgage or Auto) which has a defined maturity date and amortization schedule. As funding costs change (remember banks are levered vehicles), rates on the cards need to go up to reflect it. I am not a fan of the Universal Default that many companies use but that is slowly going away. If anyone has an installment loan watch out as some companies are changing the rates on those also.

Kohl's private label card is owned and run by Kohls so no credit card company is benefitting from it. Kohl's benefits because you now have made a conscious decision to shop at their store versus a Mervyns or other competitors.