Word on the street is millionaires swipe with special cards. Think platinum, gold, or the legendary “black card” that offers fancy perks and sky-high limits.
According to The Ascents research on how rich Americans use credit cards, the truth is less glamorous. Millionaires tend to use the same banks that average Americans do. And millionaires arent saints — many disregard sound financial advice.
The average American may be better off avoiding millionaire credit card habits. For one thing, millionaires carry a lot of cards. Too many, according to some financial advisors.
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The world of millionaires is often shrouded in mystery with many wondering how the ultra-wealthy manage their finances. One question that frequently pops up is: Do millionaires really need multiple credit cards and bank accounts?
While there’s no one-size-fits-all answer, there are several reasons why millionaires might choose to have multiple cards and accounts Let’s dive into the potential benefits and drawbacks of this strategy
The Upsides of Multiple Cards and Accounts for Millionaires
- Maximizing Rewards: Millionaires often have significant spending power, making them prime candidates for reaping the benefits of various rewards programs. Multiple cards allow them to rack up points, miles, and cashback across different categories, maximizing their return on everyday purchases.
- Enhanced Security: Diversifying credit card usage across multiple accounts can provide an extra layer of security. If one card is compromised, the damage is limited to that specific account, minimizing potential losses.
- Streamlining Expenses: Millionaires may have complex financial lives, with various business ventures and personal expenses. Multiple accounts can help them categorize and track spending more effectively, making it easier to manage their finances.
- Taking Advantage of Welcome Bonuses: Some credit cards offer lucrative welcome bonuses for new customers. By strategically opening and closing cards, millionaires can potentially earn thousands of dollars in bonus rewards.
- Building Credit History: Having multiple credit cards with responsible usage can help millionaires build a strong credit score, which is crucial for securing favorable loan rates and other financial benefits.
Potential Downsides to Consider
- Management Complexity: Juggling multiple cards and accounts can be time-consuming and require meticulous organization. Millionaires need to be disciplined to avoid missing payments or incurring unnecessary fees.
- Annual Fees: Some premium credit cards come with hefty annual fees. Millionaires need to weigh the benefits of the rewards program against the annual cost to determine if the card is truly worthwhile.
- Temptation to Overspend: Having easy access to multiple credit lines can be tempting, potentially leading to overspending and debt accumulation. Millionaires need to exercise self-control and stick to a responsible budget.
Analyzing the Data: What the Experts Say
A recent study by The Motley Fool surveyed over 1,500 high-net-worth Americans to understand their credit card habits. The results revealed that:
- 70% of millionaires have two or more credit cards.
- Millionaires are more likely to prioritize rewards over interest rates when choosing a card.
- Bank of America and American Express are the most popular credit card issuers among millionaires.
- Millionaires are interested in credit cards offering cryptocurrency rewards and supporting environmental or social causes.
These findings suggest that millionaires strategically utilize multiple credit cards to maximize rewards and align with their values However, it’s crucial to remember that responsible management and disciplined spending are key to reaping the benefits without falling into potential pitfalls.
The Bottom Line: A Tailored Approach
The choice to have numerous credit cards and bank accounts ultimately depends on personal circumstances and financial objectives. To find the best financial management plan, millionaires should carefully consider their spending habits, risk tolerance, and desired rewards.
It’s important to approach financial decisions with a clear understanding of your needs and a commitment to responsible management. Keep in mind that there is no magic formula.
Millionaires trust big banks
Millionaires tend to trust the same large banks as regular Americans. Big banks offer premium credit cards with zero annual fees. Here are the most popular banks among the wealthy:
- Bank of America (50%)
- American Express (38%)
- Capital One (35%)
Even though the most prestigious credit cards come with fancy benefits and bragging rights for high spenders, most luxury “black cards” come with hefty annual fees that range from $400 to $700. Users would have to spend a lot for credit card rewards to offset fees.
Millionaires lug around more credit cards
Seventy percent of millionaires carry two or more credit cards, according to The Ascent data. Of those, about half possess three or more cards. That goes against the conventional wisdom regarding credit cards, which advises consumers to only use one or two cards at a time.
Heres a breakdown of how many credit cards millionaires own compared to non-millionaires:
| Number of credit cards | % of ownership (millionaires) | % of ownership (non-millionaires) |
|---|---|---|
| 0 | 9% | 24% |
| 1 | 22% | 36% |
| 2 | 37% | 25% |
| 3 | 21% | 9% |
| 4 or more | 12% | 7% |
Most non-millionaires own fewer than three cards — a smart move. Having too many cards endangers spenders; they become more likely to overspend or miss payments. By keeping credit cards manageable, users shrink the likelihood of going into debt.
So why do millionaires have so many credit cards? Their money might give them the assurance to make late payments, but only 33 07% of millionaires pay off their monthly credit statements. And millionaires are much less likely than others to care about interest rates.
Kevin O’Leary: How Many Credit Cards Should You Have?
FAQ
How many credit cards do millionaires have?
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How many credit cards do you have
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Net worth greater than $1 million
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Net worth less than $1 million
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1
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22%
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36%
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2
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37%
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25%
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3
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21%
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9%
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4 or more
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12%
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7%
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What kind of credit card do rich people use?
How many million people have a credit card?
How many millionaires have credit cards?
The vast majority (70%) of millionaires have two or more credit cards, but a full 9% have no credit cards at all. In comparison, 24% of people with a net worth below $1 million are completely cardless. Modern society borderline requires having at least one credit card. They’re safer than debit cards, especially for online shopping.
What credit card do millionaires use?
Millionaires use credit cards like the Centurion® Card from American Express and the J.P. Morgan Reserve Credit Card. These high-end credit cards are available only to people who receive an invitation to apply, which millionaires have the best chance of getting.
Do millionaires prefer credit cards?
Based on a survey distributed by The Motley Fool Ascent, millionaires have some different preferences than the less wealthy when it comes to credit cards. For example, they’re more likely to have travel rewards cards and place more importance on rewards over interest rates.
Which credit card issuer is most popular among millionaires?
Despite the wealthiest being associated with luxury credit cards and so-called “black cards,” Bank of America is the most popular credit card issuer among millionaires. Fifty percent of Americans with a net worth over $1 million have a Bank of America credit card.