Then there's the flip side of using credit cards to get a 1%+ discount on things and paying it off in full. If you have the cash and discipline, debt can be used for very low risk benefit.
And CC companies bank on the fact that if even a small percentage of people aren't able to pay it off in full they'll get their "rewards" back in full within a single period of interest.
They also bank of the fact that you will use your plastic for more frivolous purchases since it's so convenient. Plus you think you're getting some cash back reward later, so you don't feel so bad about it. If you had to pay cash, you might not be wasting as much money.
Yep, they make money either way. However, it only takes 1 person carrying a balance at 20% to make up for the rewards of 20 people who spend and pay off.
