Many upper-class people love using credit cards, and some even pay thousands of dollars every year for exclusive cards like the American Express Centurion. But a new analysis by The Motley Fool shows that rich Americans (net worth over $1 million) are less likely to use cash-back credit cards.
The data shows only 59% of upper-class people have a cash-back card, as per the report by The Motley Fool. In comparison, 72% of Americans with net worth under $1 million have cash-back cards. Cash-back cards are popular because you earn a small percentage of money every time you swipe your card.
These cards also have extra perks like rental car insurance and mobile phone protection. But for wealthy Americans, earning just a few hundred dollars a year through cash-back is not attractive or useful for their large financial lifestyle.
Credit cards with large sign-up bonuses are also popular with wealthy people because they use a strategy called credit card churning. Churning means opening new credit cards again and again just to collect the big sign-up bonuses. One example is the American Express Platinum, which is the second most expensive credit card in the U.S.
This card offers 175,000 Membership Rewards points as a sign-up bonus. These points can be used for travel or converted into $3,500, according to ThePointsGuy. So even though rich Americans don’t prefer cash-back cards, they still earn huge rewards through other smart credit card strategies.
No, only 59% of wealthy Americans have cash-back cards, as per The Motley Fool.
Q2. What credit cards do rich people prefer?
Rich Americans prefer travel rewards cards and cards with big sign-up bonuses for better perks.
The data shows only 59% of upper-class people have a cash-back card, as per the report by The Motley Fool. In comparison, 72% of Americans with net worth under $1 million have cash-back cards. Cash-back cards are popular because you earn a small percentage of money every time you swipe your card.
These cards also have extra perks like rental car insurance and mobile phone protection. But for wealthy Americans, earning just a few hundred dollars a year through cash-back is not attractive or useful for their large financial lifestyle.
Travel rewards and big bonuses
Instead, rich people prefer cards that match their lifestyle better, especially travel rewards cards and cards with big sign-up bonuses. Travel rewards cards let them redeem points for flight upgrades, free hotel nights, or discounted airfare, as per the report by The Motley Fool. These rewards often need a lot of points, but rich individuals swipe their credit cards for most of their purchases, making the rewards easier to reach.Credit cards with large sign-up bonuses are also popular with wealthy people because they use a strategy called credit card churning. Churning means opening new credit cards again and again just to collect the big sign-up bonuses. One example is the American Express Platinum, which is the second most expensive credit card in the U.S.
This card offers 175,000 Membership Rewards points as a sign-up bonus. These points can be used for travel or converted into $3,500, according to ThePointsGuy. So even though rich Americans don’t prefer cash-back cards, they still earn huge rewards through other smart credit card strategies.
FAQ
Q1. Do rich Americans use cash-back credit cards?No, only 59% of wealthy Americans have cash-back cards, as per The Motley Fool.
Q2. What credit cards do rich people prefer?
Rich Americans prefer travel rewards cards and cards with big sign-up bonuses for better perks.
