The dangerous thing about credit cards is that they can open the door to debt. Someone who can’t really afford a purchase can charge that item to a credit card, have a balance for several months, and rack up a ton of interest by the time that purchase is paid off.
In fact, people often rely on credit cards when they can’t make ends meet with their paychecks alone. But it’s not just low-income people who often use credit cards. Rich people also use credit cards all the time. Here’s why credit cards are good for the rich.
1. They offer free money or economic benefits
One of the main reasons that many people get rich is that they take every opportunity to increase their income. And cash back on essential purchases fits into that system.
Anyone who uses credit cards can consistently earn reward points or cash back on their purchases, regardless of their income status. The difference is that people who have a lot of money tend to spend more money – and therefore they make even more money in the process. Plus, wealthy people may be more likely to qualify for credit cards that offer particularly generous rewards programs, maximizing their cash back, airline miles, or hotel points.
In addition, some credit cards offer benefits that allow the wealthy to keep more of their money. Travel reward cards, for example, typically offer perks like free checked baggage or cash on in-flight purchases that make vacations cheaper. And while the rich may not need the discount, they probably appreciate it.
2. They can offer access to special events
Some credit cards offer cardholders early access to concert tickets or passes to sporting events. Others offer VIP seating. Granted, the rich may have other channels to access tickets and VIP status, but credit cards can be an easy way to skip the lines.
3. They are simply practical
Rich people don’t necessarily carry wads of cash, so when they go to stores or want to make a purchase, credit cards are an easy way to pay. Because the rich may not have to worry about accumulating balances they cannot pay, credit cards can allow them to shop more freely.
Obviously, rich people have a lot to like about credit cards. But the reality is, you don’t have to be rich to get the most out of your credit cards. You can be an average earner while still enjoying cash back programs, economic benefits, access to events, and the convenience of not carrying cash all the time. Do not go too far in your spending, so that you can take advantage of your credit cards without having financial problems.
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