If you have 100 customers who are using your credit card and only 20% actually pay back their debt, aren't you loosing money as a company by having to right off the rest as loses?

They usually have a much better payment history than 20%. They look at your credit score and payment history before they approve your credit card application. The interest rates are high enough that they make plenty of profit since the majority of card holders do not pay more than their minimum payment amount.

If you have only 20% customers who are actually paying back, you are not doing your homework before giving them a creditcard. Take a long study of their credit history and salary before lending money.

Lending money alwyas has big risks.

The interest charges on credit debt, is so high, that you should still make more money.

For example, if they charge $100, and pay $100 in interest and principal, and still owe $80, you have made your money, and can sell the debt also. Then you write off the loss as a tax deduction.

Your profit margin should be about 80%, so you only paid $20 for the item, and get $100 for it, and they still owe $80, you win all the way.

Then you have a penalty when the payments are late.