Published in: Travel | Dec. 12, 2018

4 Surprising Ways Millionaires Use Credit Cards

The ultra-wealthy use their credit cards in very intriguing ways. Do you share any of their habits?

To twist around a famous F. Scott Fitzgerald quote, the very rich aren’t that much different from you or me -- at least in relation to credit cards. Just like our humble selves, the ultra-wealthy rely on plastic to help fund their expenses and extravagances.

As a rule, however, those with access to large amounts of capital tend to be more careful and strategic about their credit card use. Here are a few ways millionaires use credit cards.

Millionaires in a limo.Image credit: Getty Images

1. They hold only a few credit cards

Several years ago, a financial writer named Tom Corley conducted research on the fiscal habits of wealthy individuals. Among other interesting tidbits, Corley discovered that a mere 8% of such people used more than one credit card.

This might be a bit surprising; if you’re wealthy, why wouldn’t you grab every card available to you?

There’s no way to speak for every millionaire, but the key advantage of having one, or just a few, cards is obvious. Owning a small number cuts down on the time and effort needed to manage them. This is particularly true of modern credit cards, which often have extensive rewards programs.

Also, the wealthy tend to own cards that have very high credit limits. So a small handful of such cards is typically enough to take care of their spending needs.

2. They get paid by their cards

High net worth individuals tend to favor credit cards that ladle out the rewards. After all, if you’re spending a lot with them, you should get as much possible in return from your issuer.

Happily for these customers, card issuers are well aware of this preference. As a result, they tend to be comparatively generous with rewards. The higher-end Chase Sapphire Preferred® card, for example, puts no limit on how much a cardholder can earn under its 2 points per $1 spent on dining and travel (frequent activities for many wealthy people).

The rich also benefit from cards that are flexible in their rewards programs. Taking Chase Sapphire Preferred® as an example again, cardholders can redeem their points with a relatively high number of transfer partners.

3. They pay them off on time, and in full

Many, if not most, wealthy individuals got that way partially due to smart and prudent financial management. We at The Ascent firmly believe in being timely with credit card payments, settling them in full every month when and however possible. Anecdotal evidence and hard research indicates that rich people habitually follow both principles.

This helps preserve their finances. We should always remember that credit card interest is extremely high, since the issuers need to make a profit from their business. Even a modest amount of debt can spiral into a big problem if not paid down.

High net worth spenders might use their plastic often for purchases, but the smart ones consistently pay off that debt before it becomes a problem.

4. They travel very comfortably

The rewards-heavy cards favored by the rich also tend to be stuffed with perks and features. Wouldn’t you offer such things if you were an issuer aiming to attract high-spending clients?

Many of these extras are concentrated on travel, and the perks can be plenty. Among them are:

  • Airport lounge access

  • Partial credit for ticket purchases

  • Primary car rental insurance

  • Trip cancellation/interruption insurance

  • Credits for ride-sharing services

  • No foreign transaction fee

With these travel benefits packed onto their plastic, the wealthy can get to their destination and move around in a high degree of comfort (and peace of mind, thanks to those insurance perks). Also, using a good card as a go-to spending instrument, they rack up those rewards points/miles without incurring an annoying foreign transaction fee.

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