7 Reasons The Rich Use Credit Cards (Even Though They Don’t Have To)

We all know that the rich – and even the “Millionaire Next Door” types – handle their money differently. Instead of looking for ways to display their wealth, they actively hide it. And instead of hoarding “stuff,” they strive for financial independence and seek out focused opportunities that help them earn more money.

So even though rich people don’t necessarily need to use credit cards, they still do. Here are seven reasons why:

1. Awards

Since many cards offer 1% to 2% cash back for every purchase you make, it’s not hard 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 airline tickets every year.

2. Free travel insurance

Although you can purchase your own travel insurance, many of the major travel credit cards offer different forms of travel insurance free of charge. Take the Chase Sapphire Preferred card, for example. This card provides primary car rental coverage, baggage delay insurance, trip delay reimbursement, lost baggage reimbursement, emergency assistance, travel accident insurance, and other benefits.

Also: Best Marriott Credit Cards: Enjoy Extra Travel Perks

Another popular perk is the card’s Trip Cancellation/Interruption Insurance. This insurance covers the cardholder and immediate family members up to $10,000 per covered trip and $20,000 per occurrence with a maximum benefit of $40,000 every 12 months.

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

While the wealthy could easily buy a travel insurance policy that offers 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 insurance without paying.

3. Benefits

Some of the best travel credit cards offer travel benefits that make traveling the world 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 also offers access to the Global Lounge Collection. This collection of airport lounges includes more than 1,200 exclusive lounge locations around the world.

Cardholders also receive free benefits with Fine Hotels & Resorts, a luxury travel brand, as well as a credit of up to $200 on airline fees for checked baggage and in-flight purchases. Finally, cardholders get credit towards application fees for Global Entry or TSA Precheck — airport programs that let you skip the lines and get expedited security when you travel.

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

Basically, everyone likes to skip the queues at the airport, so we shouldn’t be surprised that the wealthy are gobbling up this perk in droves.

4. Consumer Protection

In addition to the fancy travel perks everyone loves, credit cards offer significant consumer protections that 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 allow you to return an item even if a store doesn’t.

Extended warranties are another big perk that everyone loves. Extended warranty coverage by Chase, for example, extends the US manufacturer’s warranty on qualified items for an additional year, provided the original warranty was three years or less. Coverage is good for $10,000 per claim and up to $50,000 per year, which is hardly 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 why the rich love their credit cards. For starters, a range of premium travel credit cards offer cardholders access to special events ranging from concerts to sold-out sporting events.

For example, Citi Entertainment is a program created for Citi cardholders. If you qualify, you can access pre-sale concert tickets, special promotions and VIP events.

6. Security

Research shows that using credit cards can be safer, especially when it comes to shopping online. This is because the majority of credit cards offer no liability for fraud, and federal law limits your liability to only $50 for unauthorized charges made with your credit card anyway.

But, if you use a debit card, you could be liable 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 you submit your statement, you could be held liable for all fraudulent purchases as well as any money the thief is able to extract from your bank account.

7. Concierge

Most of the best travel credit cards offer concierge services that can help you do just about anything.

Let’s say you have the Platinum Card from American Express. You can either call the 1-800 number or email their travel concierge for help with all sorts of things. For example, you could:

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

These are just a few examples of how a concierge service could help you; Sky is the limit. And in the absence of your own butler or personal 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.]