You're evaluating the economics of a credit card customer segment and want to understand whether it is attractive on a per-account basis. You have a few core inputs: annual fee revenue, interest income from revolving balances, expected credit losses, and operating costs. The goal is to translate those inputs into a simple annual net revenue figure per account.
A credit card segment has an annual fee of $95 and an average balance of $2,000 at an 18% APR. If the charge-off rate is 4% and operational costs are $50 per account, what is the net revenue per account?