Do Rich People Use Credit Cards and How They Use Them to Build Wealth

Rich people do use credit cards, but not for the same reasons as the average consumer. They use credit cards as a tool to build wealth, not just to make purchases.

According to a study, 75% of wealthy individuals use credit cards to earn rewards and cash back, which they then use to invest in the stock market or pay off high-interest debt.

Wealthy individuals often have multiple credit cards with different rewards programs, allowing them to maximize their earnings. For example, one wealthy individual was found to have 10 credit cards, each with a different rewards program.

By using credit cards strategically, rich people can earn significant rewards and cash back that can be used to build wealth over time.

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Credit card habits of the wealthy can be quite surprising. Seventy percent of Americans with a net worth over $1 million have two or more credit cards, compared to 41% of Americans with a net worth under $1 million.

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Rich Americans are more likely to have multiple credit cards, with 37% having two credit cards, compared to 25% of those worth less than $1 million. They're also more likely to have three or four credit cards, with 21% and 12% respectively, compared to 9% and 7% of those worth less.

Wealthy Americans open new credit cards more frequently, with 26% opening a new credit card twice a year, compared to 14% of those worth less. They're also more likely to open a new credit card three or more times per year, with 10% compared to 3%.

Paying off credit card balances is where the wealthy often fall short. Only a third of respondents pay their statement balances every month, and almost 20% said they almost never pay their statement balance. This can lead to a lot of money going toward interest payments.

It's surprising to see that over half of respondents had maxed out a credit card, with 51.73% reporting to have done so. This is a bad habit that can be avoided by paying off credit card balances in full each month.

Wealthy Americans often opt for cash back and no annual fee cards, and generally trust the big issuers. However, they also have some bad habits, such as about half having an automatic payment set up, and only a third paying their statement or full balance every month.

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Here's a breakdown of how often wealthy Americans pay off their statement balance:

By understanding the credit card habits of the wealthy, we can learn how to use credit cards responsibly and make the most of their benefits.

Rewards are a key part of what makes credit cards so appealing to rich people, with many cards offering 1% to 2% cashback on every purchase.

Some sign-up bonuses can be worth well into the four-figure range, and cash-back rates can be as high as 10% in some cases.

Credit card rewards come in the form of cash back, travel points, or other perks that wealthy Americans can use to enhance their lifestyles.

Wealthy Americans can earn thousands of dollars on airfare every year if they're savvy with airline miles.

The card's trip cancellation/interruption insurance is another popular perk, covering the cardholder and their immediate family members for up to $10,000 per covered trip.

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You have to use your card to pay for the trip to be covered, but the insurance will kick in to reimburse you if your trip is cancelled or interrupted for any reason.

Wealthy Americans often use credit cards to earn rewards, and it's surprising if they aren't taking advantage of them.

The benefits of credit cards include miles, cash back, travel assistance, and insurance, which can be used for their own needs or donated to others.

If you're a high spender, you can rack up meaningful rewards with ease, making credit cards a valuable tool for managing finances and simplifying spending.

Wealthy people's financial habits may differ from those of the average person, but when it comes to paying off credit cards, they don't necessarily have a better track record. Only a third of high-net-worth credit card holders pay their statement balances every month, and almost 20% said they almost never pay their statement balance.

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The majority of wealthy Americans have multiple credit cards, with 70% of those with a net worth over $1 million having two or more credit cards. This is significantly higher than the 41% of Americans with a net worth under $1 million who have two or more credit cards.

Wealthy Americans use credit cards for various reasons, including making large purchases, paying for travel and entertainment expenses, and earning rewards. They also rely on credit cards to manage their finances, simplify their spending, and take advantage of exclusive benefits that come with high-end credit cards.

Here's a breakdown of how many credit cards wealthy Americans have:

As long as they don't spend a lot on interest charges, wealthy Americans can often come out ahead by using credit cards. And, as one financial planner notes, his wealthy clients almost always pay off the balance on their cards, knowing that interest rates are high on credit cards.

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Some of the top travel credit cards offer travel perks that make traversing the globe more comfortable, such as access to over 1,200 proprietary lounge locations around the world.

Cardholders of the Platinum Card from American Express can enjoy complimentary benefits with Fine Hotels & Resorts, a luxury travel brand.

With this card, you can also get up to a $200 airline fee credit for checked bags and in-flight purchases, which can be a huge relief when traveling.

The Platinum Card from American Express also offers a credit to cover the costs of applying for Global Entry or TSA Precheck, allowing you to skip lines and get expedited security when you fly.

Cardholders can also use their credit cards to purchase high-end fashion, expensive jewelry, or other luxury goods, allowing them to make these purchases without having to pay for them upfront.

In addition to these benefits, many top travel credit cards offer concierge services that can help you do, well, just about anything, from ordering flowers to securing hard-to-get dining reservations.

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Luxury items can be a treat for the wallet, but they don't have to break the bank. Wealthy Americans might use credit cards to buy high-end fashion or expensive jewelry without paying upfront, and some cards even offer rewards or perks.

Some credit cards offer benefits that make luxury purchases more appealing. For example, The Platinum Card from American Express offers a $200 airline fee credit for checked bags and in-flight purchases.

Having a personal concierge service is a luxury that's within reach with top travel credit cards. Many of these cards offer concierge services that can help you with just about anything.

You can use the concierge service to order flowers for anyone using a local florist, and have the charges placed on your credit card. This is just one example of how a concierge service can assist you.

The Platinum Card from American Express is a great example of a card that offers a comprehensive concierge service. You can call the 1-800 number or email their travel concierge to get help with a wide range of tasks.

Some examples of what you can ask your concierge service to do include securing hard-to-get dining reservations at popular restaurants. This can be a huge perk, especially if you're traveling to a new city and want to try out the best local cuisine.

You can also request and receive concert tickets to a show the day they go on sale. This is just one of the many ways a concierge service can help you experience the best of what a city has to offer.

Here are a few examples of what you can ask your concierge service to do:

For wealthy Americans, credit cards can be a useful tool for managing cash flow. They can make large purchases without having to pay for them upfront, allowing them to have more cash for investments or other opportunities.

Using credit cards to finance large purchases is especially useful for time-sensitive investment opportunities. This strategy gives them the flexibility to take advantage of opportunities as they arise.

Wealthy individuals often pay off their credit card balances, as they're aware of the high interest rates associated with credit cards. They have alternatives and prefer not to pay interest if they can help it.

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