Actually most (depending on the card, the great majority) of those fees end up going right back to the cardholder. Those fees are what pays for all those airline points, cash-back discounts, guarantees and liability protections, purchase insurance etc.
Another way of thinking about credit cards is a way that a large groups of customers are able to band together to collectively demand discounts, rewards and other valuable protections from merchants in exchange for their business.
The banks compete amongst themselves to win your business as a cardholder by trying to negotiate higher discounts from merchants. (the fees paid by merchants are called MDR or merchant discount rate).
Another way of thinking about credit cards is a way that a large groups of customers are able to band together to collectively demand discounts, rewards and other valuable protections from merchants in exchange for their business.
The banks compete amongst themselves to win your business as a cardholder by trying to negotiate higher discounts from merchants. (the fees paid by merchants are called MDR or merchant discount rate).