From Yahoo Finance: 2024-04-23 19:43:00

Millionaires are more likely to use rewards credit cards, with almost all adults earning over $100,000 having a credit card. These cards offer valuable perks, like cash back on purchases or travel rewards. Even average consumers can benefit from using credit cards strategically to earn rewards and sign-up bonuses.

Millionaires also use credit cards for added protections and insurance coverage. Cards like the Chase Sapphire Preferred® Card offer benefits such as auto rental collision damage waiver and trip cancellation insurance. Some cards even provide cell phone protection, making them a convenient and secure payment option for high-income individuals.

Travel perks are another reason why millionaires prefer credit cards over cash or debit. Cards like the Capital One Venture X Rewards Credit Card offer TSA PreCheck or Global Entry fee credits, airport lounge access, and travel concierge services. These perks enhance the travel experience and provide added convenience and luxury for frequent travelers.

Credit cards provide protection against fraud, with limited liability for unauthorized purchases. Unlike debit cards, where you may be responsible for the entire amount of unauthorized transactions, credit cards offer a maximum liability of $50. This security feature adds an extra layer of protection for cardholders, especially for high-income individuals.

Tracking spending is easier with credit cards, as they allow syncing with budgeting software and provide detailed transaction records. This makes it simpler to monitor expenses, identify trends in spending habits, and prepare for tax season by easily accessing records for deductions. Credit cards offer convenience and organization for managing finances effectively.

Rich people use various types of credit cards, including popular travel cards like The Platinum Card® from American Express and Chase Sapphire Reserve®. While they can pay off credit card debt easily, they focus on maximizing benefits like earning rewards, utilizing travel perks, and taking advantage of card protections and insurance coverage. Credit cards offer a range of benefits for all cardholders, regardless of income level.

Read more: Do millionaires use credit cards? Yes, and so should you.