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7 reasons the wealthy use credit cards (even though they don't have to)

Instead of looking for ways to flaunt their wealth, the wealthy keep it hidden. They strive for financial independence and seek out targeted opportunities that credit cards offer.
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Written by Holly Johnson on
Reviewed by Evan Zimmer

We all know that the rich -- and even the "Millionaire Next Door" types -- handle their money differently. Instead of looking for ways to flaunt their wealth, they actively keep it hidden. And instead of accumulating "stuff," they strive for financial independence and seek out targeted opportunities that help them earn more money.

So even though wealthy folks don't necessarily need to use credit cards, they still do. Here are seven reasons why:

1. Rewards

Since many cards offer 1% to 2% cashback for every purchase you make, it's not difficult to rack up meaningful rewards if you spend a lot on your cards. And if you're savvy with airline miles, you can easily save thousands of dollars on airfare every year.

2. Free travel insurance

While you can buy your own travel insurance plan, many of the top travel credit cards offer different forms of travel insurance for free. Take the Chase Sapphire Preferred® Card, for example. This card offers primary auto rental coverage, baggage delay insurance, trip delay reimbursement, lost luggage reimbursement, emergency assistance, travel accident insurance, and other benefits.

Also: The best Marriott credit cards: Enjoy extra travel perks 

The card's trip cancellation/interruption insurance is another popular perk. This insurance covers the cardholder and their immediate family members for up to $10,000 per covered trip and $20,000 per occurrence with a maximum benefit of $40,000 every 12 months.

You have to use your card to pay for the trip to be covered. But the insurance will kick in to reimburse you if your trip is cancelled or interrupted for any reason, such as severe weather, accidental bodily injury, or financial insolvency of your tour operator or airline.

While the rich could easily buy a travel insurance policy that provides these benefits, why not get it for free if you can? Not only can they earn rewards for using their card to pay for their trip, but they get tens of thousands of dollars in travel coverage without paying for it.

3. Perks

Some of the top travel credit cards offer travel perks that make traversing the globe more comfortable. The Platinum Card® from American Express is a good example. Not only does it offer some pretty epic rewards with its Membership Rewards loyalty program, but it offers access to the Global Lounge Collection as well. This collection of airport lounges includes over 1,200 proprietary lounge locations around the world.

Cardholders also get complimentary benefits with Fine Hotels & Resorts, a luxury travel brand, along with up to a $200 airline fee credit for checked bags and in-flight purchases. Last but not least, cardholders get a credit to cover the costs of applying for Global Entry or TSA Precheck -- airport programs that let you skip lines and get expedited security when you fly.

Also: The best credit cards for good credit: Reap the rewards

Basically, everyone loves skipping lines at the airport, so we shouldn't be surprised that the wealthy gobble up this perk in droves.

4. Consumer protections

In addition to the fancy travel perks everyone loves, credit cards offer some meaningful consumer protections you can benefit from if you play your cards right. Some rewards cards offer guaranteed returns -- as in, your card will refund your money and let you return an item even if a store won't. 

Extended warranties are another big perk everyone else loves. Extended warranty coverage through Chase, for example, extends the US manufacturer's warranty on qualified items for an additional year, provided the initial warranty was three years or less. The coverage is good for $10,000 per claim and up to $50,000 per year -- which is hardly pocket change, even for the very wealthy.

5. Access to special events

Beyond the glamor of airport lounge access and extended warranties, you'll find even more reasons the wealthy, love their credit cards. For starters, an array of top travel credit cards offer cardholders access to special events that range from concerts to sold-out sporting events.

For example, Citi Entertainment is a program created for Citi cardmembers. If you qualify, you can get access to presale concert tickets, special promotions, and VIP events.

6. Safety

Research shows that using credit cards can be safer, especially when it comes to online purchases. That's because the majority of credit cards offer zero fraud liability, and federal law limits your liability to just $50 for unauthorized charges made with your credit card anyway.

But, if you use a debit card, you could be on the hook for up to $500 in fraudulent purchases if you don't report the fraud within two business days. And if you don't notice the fraud for 60 calendar days after your statement is sent to you, you could be liable for all fraudulent purchases plus any money the thief is able to extract from your bank account.

7. Concierge service

Many of the top travel credit cards offer concierge services that can help you do, well, just about anything.

Say you have the Platinum Card from American Express. You can either call the 1-800 number or email their travel concierge to get helps with all sorts of things. For example, you could:

  • Have the Amex concierge order flowers for anyone using a local florist, then place the charges on your Amex credit card.
  • Ask the concierge to help you secure hard-to-get dining reservations at the world's most popular restaurants.
  • Request and receive concert tickets to a show the day they go on sale.

These are just a few examples of ways a concierge service could assist you; the sky is the limit. And in the absence of your own personal butler or assistant, a helpful credit card concierge service may be the next best thing.

[This article was first published on The Simple Dollar in 2020. It was updated in March 2022.]

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