by Christy Bieber | Published on Oct. 11, 2021
Image source: Getty ImagesIf 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.