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May 17, 2022
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Fizz

How does Fizz make money?

Fizz doesn’t charge fees. We don't charge interest. We don’t charge you a membership fee. So how do we make money? Read on to find out.

Most of us have heard the saying “there’s no such thing as a free lunch.” So when you hear that Fizz is completely free and doesn’t charge interest, it’s understandable that you might be skeptical. After all, something has to pay to keep the lights on at Fizz headquarters.

It’s still true that Fizz is completely free. You’ll never have to pay fees or interest with a Fizz card. It’s one of our guiding principles. While companies like Discover, Chase, and Bank of America make you pay them to use their products while charging you hidden fees and high interest rates, we don’t believe that college students should have to suffer to build credit and earn rewards.

So how does Fizz make money?

Fizz makes money from the interchange fees charged to merchants when you use your card. If you’re a little confused by that statement, you’re not alone. Let’s take a closer look.

The four main card networks are Mastercard, Visa, American Express and Discover. If you have a card in your wallet that you use to spend money, chances are that it’s in one of these four networks. Your Fizz card, for example, is a Mastercard.

When you use your Fizz card at your local coffee shop, the coffee shop doesn’t get to keep 100% of what you pay. In order to actually accept your Fizz card, the coffee shop has to pay a small percentage of your transaction to Mastercard itself. Fizz then takes part of that percentage. That’s exactly where we make our money. Still no fees, still no interest. We think it’s a better way of doing things than taking money out of your pocket.

How much does Fizz get?

The fee that Mastercard takes is only around 2% of each transaction, so the coffee shop in question doesn’t lose too much money by accepting cards. In theory, the additional business the shop brings in by accepting Mastercard is enough to make up for the fee they have to pay. Every card network charges their own fees, some higher than others. American Express tends to charge higher fees, which is why you might notice that some stores don’t accept American Express cards.

Some stores even charge an extra fee for using a credit card or a debit card. On the other hand, many stores have been known to increase all of their prices to try and offset the fee. Regardless, these fees aren’t paid directly by you as a Fizz cardholder. They’re paid entirely by any store or brand that accepts credit card - so you don’t need to worry about getting a bill in the mail just for spending your money.

Is there a catch?

There’s no catch. Fizz doesn’t charge fees and we don’t charge interest. We make all of our money from what Mastercard charges stores and other merchants. Sure, about 2% of every transaction doesn’t seem like much, but those numbers add up over time. According to the Education Data Initiative, the average monthly cost of food for a college student is $547. Just 2% of that is about $11 every month from a single person, so imagine 1,000, 10,000, or even 100,000 people all using their Fizz cards every month. The more Fizz cardholders, the more we earn from merchants. It’s that simple.

We don’t want to brag about money, but we also think that it’s important to be transparent. There are too many cards out there that make money off of unknowing and naive students by charging hidden fees and sky-high interest rates. Fizz doesn’t do anything of the sort, and we want to make sure that you know that. It’s part of what makes Fizz the best option for college students, whether you’re looking to build credit, earn rewards, budget on your own, or all of the above. So join us and become one of the first people to get your hands on a Fizz card.

Join Fizz, the debit card for college students
bio

Sam Lipscomb

Sam is a Kenyon College alum and is head of content at Fizz. He's been a go to personal finance resource among his peers since getting his first credit card during his sophomore year of college. He hails from Washington, DC, loves all things aviation, and currently lives in Los Angeles.

Back
May 17, 2022
Fizz

How does Fizz make money?

Fizz is the credit card for college students

Fizz doesn’t charge fees. We don't charge interest. We don’t charge you a membership fee. So how do we make money? Read on to find out.

Most of us have heard the saying “there’s no such thing as a free lunch.” So when you hear that Fizz is completely free and doesn’t charge interest, it’s understandable that you might be skeptical. After all, something has to pay to keep the lights on at Fizz headquarters.

It’s still true that Fizz is completely free. You’ll never have to pay fees or interest with a Fizz card. It’s one of our guiding principles. While companies like Discover, Chase, and Bank of America make you pay them to use their products while charging you hidden fees and high interest rates, we don’t believe that college students should have to suffer to build credit and earn rewards.

So how does Fizz make money?

Fizz makes money from the interchange fees charged to merchants when you use your card. If you’re a little confused by that statement, you’re not alone. Let’s take a closer look.

The four main card networks are Mastercard, Visa, American Express and Discover. If you have a card in your wallet that you use to spend money, chances are that it’s in one of these four networks. Your Fizz card, for example, is a Mastercard.

When you use your Fizz card at your local coffee shop, the coffee shop doesn’t get to keep 100% of what you pay. In order to actually accept your Fizz card, the coffee shop has to pay a small percentage of your transaction to Mastercard itself. Fizz then takes part of that percentage. That’s exactly where we make our money. Still no fees, still no interest. We think it’s a better way of doing things than taking money out of your pocket.

How much does Fizz get?

The fee that Mastercard takes is only around 2% of each transaction, so the coffee shop in question doesn’t lose too much money by accepting cards. In theory, the additional business the shop brings in by accepting Mastercard is enough to make up for the fee they have to pay. Every card network charges their own fees, some higher than others. American Express tends to charge higher fees, which is why you might notice that some stores don’t accept American Express cards.

Some stores even charge an extra fee for using a credit card or a debit card. On the other hand, many stores have been known to increase all of their prices to try and offset the fee. Regardless, these fees aren’t paid directly by you as a Fizz cardholder. They’re paid entirely by any store or brand that accepts credit card - so you don’t need to worry about getting a bill in the mail just for spending your money.

Is there a catch?

There’s no catch. Fizz doesn’t charge fees and we don’t charge interest. We make all of our money from what Mastercard charges stores and other merchants. Sure, about 2% of every transaction doesn’t seem like much, but those numbers add up over time. According to the Education Data Initiative, the average monthly cost of food for a college student is $547. Just 2% of that is about $11 every month from a single person, so imagine 1,000, 10,000, or even 100,000 people all using their Fizz cards every month. The more Fizz cardholders, the more we earn from merchants. It’s that simple.

We don’t want to brag about money, but we also think that it’s important to be transparent. There are too many cards out there that make money off of unknowing and naive students by charging hidden fees and sky-high interest rates. Fizz doesn’t do anything of the sort, and we want to make sure that you know that. It’s part of what makes Fizz the best option for college students, whether you’re looking to build credit, earn rewards, budget on your own, or all of the above. So join us and become one of the first people to get your hands on a Fizz card.

Join Fizz, the debit card for college students
bio

Sam Lipscomb

Sam is a Kenyon College alum and is head of content at Fizz. He's been a go to personal finance resource among his peers since getting his first credit card during his sophomore year of college. He hails from Washington, DC, loves all things aviation, and currently lives in Los Angeles.

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