Most of us have heard the saying “there’s no such thing as a free lunch.” So when you hear that Fizz doesn't charge hidden fees 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.

First of all, it’s true that Fizz doesn’t have interest rates and doesn’t charge late fees, transfer fees, or any hidden fees of the sort. The only fee you'll pay is your membership fee, paid monthly or yearly, and discounted if you're a student. We're talking less than $5 per month!

You’ll never get stuck with hidden fees or interest with Fizz. While companies like Discover, Chase, and Bank of America often make you pay to use their products while charging you hidden fees and high interest rates, we don’t believe that you should blindsided while building for your financial future. We want to reward you for getting an earlier start than most people.

So how does Fizz make money?

First and foremost, we make money from Fizz memberships. We want to continue building Fizz for years to come so that you can continue building credit. Membership charges make that possible. After all, we have to keep the bills paid. We aim to charge as little as possible so that you can keep your money in your pocket where it belongs. And compared to our competitors, we think that our membership fee is pretty reasonable.

We also make 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.

How much does Fizz get from interchange?

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. We make all of our money from what Mastercard charges stores and from membership fees. About $5 per month and 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 plus a membership fee is about $16 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 bottom line

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, 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. We believe that charging a fair price for a great product is the best way to run a sustainable business that will be here for years to come. And all this comes with the security of knowing that we're not selling your data or promoting random products just to make ends meet.

So join us! Download the Fizz app, and get your card today!