Analysis of the profitability of credit card companies

Question

Accepted Answer

Credit card companies' profitability can be analyzed through various financial metrics.

Analyze revenue streams such as interest income, interchange fees, and annual fees
Assess credit risk and default rates
Evaluate operating expenses and efficiency ratios
Compare profitability metrics such as return on assets and return on equity
Consider market share and competition
Example: American Express reported a net income of $6.9 billion in 2020, with a return on equity of 24.7%.
Example: Visa's revenue in 2020 was $21.8 billion, with a net income of $10.9 billion.
Example: Discover Financial Services reported a net income of $2.2 billion in 2020, with a return on equity of 23.5%.

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