Since wealthy people can afford to pay cash for almost anything, you could be wondering; do Billionaires use credit cards? Just like everyone else, even wealthy people use credit cards to make purchases. But why then do wealthy people use credit cards yet they can afford to pay cash for purchases? I will answer you in a short while.
Do Millionaires Use Credit Cards?
Yes. Just like billionaires, even millionaires use credit cards. One of the billionaires who has admitted to using credit cards is Jeff Bezos. But then, how do billionaires and millionaires use credit cards?
Do Billionaires Have a Credit Score?
Yes. Billionaires also borrow money just like me and you. Wealth and income do not have an effect on credit scores. You can be a billionaire and have terrible credit scores. What determines your credit score is how fast you repay your loans. When you repay a higher number of your debts on time, then your credit scores will increase.
Why Do Billionaires Use Credit Cards?
There are various reasons why millionaire’s use credit cards even though they can afford to pay for purchases in cash.
1. Credit Card Get Them Good Rewards
Many millionaires prefer cashback credit cards to get rewards. Wealthy people qualify for good rewards of up to 2% since they are able to make larger purchases. Rich people are always looking for opportunities to get free money and rewards. And one of the ways to get such rewards is through cashback credit cards.
Wealthy people also use credit cards to secure their money. Instead of carrying money around to make purchases, it is safer to carry a credit card. Credit cards are safer for online purchases compared to debit cards. For example, if you don’t report a fraudulent purchase in your debit card within two business days, you are likely to lose the money. For a credit card, you have up to 60 calendar days to report a fraudulent purchase.
3. Credit Card Helps Them Build Credit Score
One of the ways wealthy people can build credit scores is by making purchases using credit cards and then repaying in time. And since they need good credit scores to qualify for mortgages and personal loans, they need to build good credit scores. By building a good credit score, they can qualify for cheaper loans. And the easiest way to build credit scores is through credit card purchases.
4. Credit Cards Offer 30-day Interest Off
Many credit cards offer a duration, normally 30 days during which if you make a repayment, you will not be charged interest. As such, wealthy people take advantage of this interest-free opportunity since they are able to repay before 30-day lapses. They leverage the use of other people’s money while they have the freedom to do what they want to do with their money.
Also read: Do millionaires have debts?
5. Access to Special Events
The other way millionaire use credit cards are to gain access to airport lounges and VIP events. Besides, some credit cards offer extended warranties. If they make a purchase using some credit cards, they get an extended warranty.
6. Credit Cards Come with Other Perks
Many credit cards come with different perks to attract customers. Some of these perks include travel insurance and other kinds of perks. Don’t forget that wealthy people are always looking for free things. So, they sign up for credit cards to also enjoy such benefits.
How Many Credit Cards Do Millionaires Have?
A majority of wealthy people have between 2 to 4 credit cards on average. Half of the millionaires sign up for a new credit card at least three times a year. They prefer cash-back credit cards with no annual fees.
What Credit Cards Do Billionaires Use?
A majority of billionaires and wealthy people use Bank of America credit cards. Other credit cards that are common amongst wealthy people include American Express, Citibank, Wells Fargo, Chase, USAA, U.S Bank, and Capital One credit cards.
Read more: What credit cards do billionaires use?
Summary: Do Millionaires Use Credit Cards?
Just like any other person, billionaires and millionaires use credit cards. A majority of wealthy people have between 3 to 4 credit cards. Wealthy people use credit cards for various purposes and these cards come with different perks. Credit cards common amongst wealthy people include Bank of America and America Express credit cards.