How do Credit Card Rewards Work?

Credit cards are one of the most important financial tools you have at your disposal. They can either make your financial life or break it. If you know how to work the system and pay off credit cards each month, certain cards can actually make you money when you spend with them.All of that sounds a little weird though when you think about it. How can a company offer you, say, $500 when you sign up for the card and spend money? Or how can credit card companies give you 2% cashback on all purchases?
Obviously, the money has to be coming from somewhere, so how are banks getting all that cash to keep up with those rewards? There's 3 different ways.
Patreon: patreon.com/ConcerningReality
FB: ConcerningReality/
All images courtesy of Creative Commons or protected under Fair Use. For questions or concerns about the use of any media, please contact the page directly.
Music:
Connection

[@justinoblanco]

There are certain fees that are worth paying, depending on how much you spend. I have a 6% cash back grocery card that costs $95/year. Easy decision.
Where I Get confused is the whole travel rewards card business, with triple points on certain purchases, but only if you book flights in a specific way. Combining that with frequent flyer miles, I understand some people save a lot of cash, but it all seems to complicated to work out consistently.

[@ConcerningReality]

Yeah, totally agree. I think it’s that confusion where they’re hoping you end up not using your rewards and they get more money.

[@JohnJacobGarza]

So you have the American Express

[@JoslynShakur-e3p]

Mastercard.

[@zeepack]

At 3:16, it should be irresponsible, not unresponsible.

[@liberoAquila]

Get a life

[@johncasper9522]

So a bunch of BS. Okay, that's what I thought.

[@donis3722]

Yea said the same thing. Making money off the irresponsible ones