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4 Reasons Rich People Use Credit Cards

by Christy Bieber | Published on Oct. 11, 2021

A young woman sits and makes an online purchase, which she pays for with her credit card.

Image source: Getty Images

If you're wealthy, it still makes sense to use cards.

Most rich people can easily afford to pay cash for every purchase. Despite this, even the wealthy use credit cards regularly. Here are four big reasons why.

1. Credit cards offer a 30-day float

When you charge something on a credit card, you do not pay interest on it right away. As long as you pay the balance on your statement by the due date, you don't owe any interest on purchases. Typically, billing cycles are on a 30-day schedule, so you can essentially borrow money interest-free for that 30 days.

Many rich people take advantage of this to better manage cash flow while, in effect, getting an interest-free short-term loan. Why not leverage someone else's money for a month so you have more freedom to do what you want with your own?


2. Credit cards get you rewards

Credit cards offer generous rewards for routine spending -- especially for wealthy people, who typically qualify for the best rewards cards. Most rich people don't squander an opportunity to get free money, even if they already have plenty. They take advantage of rewards cards to get cash back or earn free travel.

The wealthy can benefit more than average earners from credit card rewards because they charge a lot. If your card pays you 2% cash back and you spend $100,000 per year, you can earn a lot more in rewards than the typical card user.


3. You can build credit with your cards

Even rich people benefit from having a good credit score. That's because lots of different kinds of companies, including utility and cell phone companies, take credit into account. The wealthy also often take out mortgages or other kinds of tax-advantaged loans that come with low interest rates. Building credit helps them score the best possible rates for strategic borrowing.

Credit cards are a great tool to build credit since all you need to do is pay them on time and not use too much of your available credit line to improve your credit score.


4. Credit cards often come with generous perks

Credit cards can provide tons of advantages -- especially cards with high annual fees that rich people are often willing to pay.

Some cards come with personal travel assistants or concierges that help book special trips or provide access to members-only events. They could offer early access to concert tickets or could open the door to airline lounges. While wealthy people may be able to get these perks elsewhere, it's easy to sign up for a credit card and reap all of these advantages.

If you don't already use credit cards like a rich person -- as a tool to build credit, earn rewards and perks, and spend interest-free for a time -- maybe now's the time. And as long as you don't carry a balance and get stuck with high interest charges, you can gain all these benefits as well.

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