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Do rich people use credit cards?

High-net-worth Americans (with a self-reported net worth of over $1 million) hold between 2 and 4 credit cards on average. Just over half of wealthy respondents open a new credit card at least three times per year. Only a third of respondents pay off their statement balance every month.

fool.com - How Do Wealthy Americans Use Credit Cards? - The Motley Fool

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The personal finance world is full of articles about how the wealthiest Americans manage their finances. The implication is usually that those not in the upper echelons of net worth should be taking on more of the habits of the rich. Is that true, though? To find out, The Ascent surveyed 1,500 credit card holders with a self-reported net worth of over $1 million. The survey shows that high-net-worth credit card holders use credit cards very much like the rest of the population – they prefer cash back cards, for example. But wealthy credit card users have some bad habits, too. This report will start with the similarities and move on to some elements where they differ from the general population. Key findings High-net-worth Americans (with a self-reported net worth of over $1 million) hold between 2 and 4 credit cards on average. Just over half of wealthy respondents open a new credit card at least three times per year.

Only a third of respondents pay off their statement balance every month.

Wealthy credit card holders prefer cash back cards and put a strong emphasis on no annual fees. Bank of America credit cards are the most popular and the most trusted among high-net-worth credit card users. Wealthy people use credit cards similarly to everyone else Most high-net-worth credit card holders behave similarly to other credit card holders across income levels. For example, most wealthy credit card users have two to four different cards: How many credit cards do you currently hold? Percentage of respondents 1 13.27% 2 16.67% 3 15.53% 4 15.47% 5 12.27% 6 to 10 13.07% More than 10 13.73% Data source: The Ascent survey of 1,500 high-net-worth American credit card holders, conducted December 30, 2021. This is comparable to the national average of 2.7. When it comes to opening new cards, wealthy cardholders were slightly more likely to open three or more new cards per year. This may indicate a high turnover in the cards that they use. How often do you open a new credit card, on average? Percentage of respondents Once per year or less 26.20% Twice per year 23.20% Three times per year 23.00% More than three times per year 27.60% Data source: The Ascent survey of 1,500 high-net-worth American credit card holders, conducted December 30, 2021. As with the number of cards held, those with the highest self-reported net worth – over $10 million – were slightly more likely to open more than three cards every year.. High-net-worth credit card holders also prefer to make purchases with credit cards, which echoes the overall national trend. How do you PREFER to make purchases in general? Percentage of respondents Credit card 32.60% Cash 23.80% Debit card 22.73% Check 20.87% Data source: The Ascent survey of 1,500 high-net-worth American credit card holders, conducted December 30, 2021. A remarkable 21% of high-net-worth respondents prefer to pay with a check. If you forgot that checks were even an option, you're not alone. Wealthy credit card holders have bad habits, too High-net-worth credit card holders are often held up as model users of credit. Interestingly, these results didn't point that way – at least when it comes to paying off credit cards on time. Only a third of respondents pay their statement balances every month, and almost 20% said they almost never pay their statement balance. Compare that to the 60% of respondents in The Ascent's 2021 survey who said they pay their statement or full balance every month. How often do you pay off your statement balance (not necessarily your entire card balance), on average? Percentage of respondents Every month 33.07% Not every month, but often 22.20% A few times a year 24.80% Almost never 19.93%

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Data source: The Ascent survey of 1,500 high-net-worth American credit card holders, conducted December 30, 2021. That's a lot of money going toward interest payments. With that in mind, it might not be surprising that over half of our respondents had maxed out a credit card. The only group that saw a number under 50% was those with a self-reported net worth of $5 million to $10 million. Have you ever maxed out a credit card? Percentage of respondents Yes 51.73% No 48.27% Data source: The Ascent survey of 1,500 high-net-worth American credit card holders, conducted December 30, 2021. Another surprising result of our survey is that just over half – 50.93% – of respondents have automatic billing set up. The rest pay manually online or use another method. Setting up automatic billing can help credit card users avoid interest charges by removing the possibility of forgetting to make a payment. High-net-worth credit card holders prefer cash back cards with no annual fees We've seen that wealthy credit card users tend to use credit cards in roughly the same way as the rest of us (and that they even have some bad habits you might not expect). But which credit cards are they using? There are lots of credit cards specifically for wealthy people, but high-net-worth card holders also tend to gravitate toward the same best credit card brands and features that the general population does. Cash back cards, for example, are most popular, with almost 40% of respondents holding one. Travel rewards cards, balance transfer cards, and secured cards were also held by at least a third of our respondents. Which of the following types of credit cards do you have right now? Percentage of respondents Cash back card 39.20% Balance transfer card 34.87% Travel rewards card 34.60% Secured card 34.40% Sign-up bonus card 33.40% 0% APR card 30.53% Student card 30.27% Data source: The Ascent survey of 1,500 high-net-worth American credit card holders, conducted December 30, 2021. Those on the lower end of the high-net-worth spectrum (with a self-reported net worth of $1 million to $5 million) were more likely than other net-worth groups to hold a cash back card at 46% (other net worth groups averaged around 35%). When we asked our respondents for the most important thing they look at when choosing a credit card, they were equally likely to favor "no annual fee" and "card design," though the card's interest rate and rewards rates weren't far behind. There wasn't much variation between the net worth categories in this arena. Despite placing a high value on cards without annual fees, less than 20% of our respondents said they don't pay any card fees. In fact, over 40% of them said they have a card with an annual fee of over $100. What is the largest annual fee that you currently pay for a single credit card? Percentage of respondents I don't pay any annual fees 18.47% Less than $50 18.33% $50 to $100 20.80% $101 to $250 21.20% More than $250 21.20% Data source: The Ascent survey of 1,500 high-net-worth American credit card holders, conducted December 30, 2021. Over 20% even have cards that require an annual payment for $250 or more, a number we wouldn't expect to see among the general population of cardholders. Bank of America is the most popular and trusted issuer among wealthy credit card users Bank of America credit cards were the most popular among wealthy credit card holders, with just under one-third saying they have one.

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From which of the following issuers do you currently hold a card? Percentage of respondents Bank of America 31.93% American Express 28.67% Citibank 27.67% Wells Fargo 27.60% Chase 26.80% USAA 26.73% U.S. Bank 25.87% Capital One 25.87% Discover 25.00% Barclays 24.80% PNC 22.87% Navy Federal Credit Union 22.00% Other 21.93% Data source: The Ascent survey of 1,500 high-net-worth American credit card holders, conducted December 30, 2021. Interestingly, the wealthiest of our respondents were more likely than the rest to hold a USAA card, while being slightly less likely to hold Citibank, PNC, or Wells Fargo cards. When it comes to trust, the same names rise to the top: Bank of America is the most-trusted credit card issuer among high-net-worth card holders, with American Express coming second. Which of the following credit card issuers do you find MOST trustworthy? Percentage of respondents Bank of America 12.73% American Express 10.00% Chase 8.87% Discover 8.53% USAA 8.47% U.S. Bank 8.47% Capital One 8.40% Wells Fargo 7.80% PNC 7.07% Navy Federal Credit Union 6.93% Citibank 6.73% Barclays 6.00% Data source: The Ascent survey of 1,500 high-net-worth American credit card holders, conducted December 30, 2021. The wealthiest respondents were most likely to trust USAA or U.S. Bank, while they were less sure than the other groups about Chase. High-net-worth credit card holders are interested in crypto, environmental, and social cards The Motley Fool's recent study found that high-net-worth investors are interested in cryptocurrency – and this survey echoes that finding. Just under a third of our respondents said they'd be "very likely" to apply for a credit card that offered crypto rewards. This was consistent across the board, regardless of self-reported net worth. How likely would you be to apply for a credit card that delivered rewards in cryptocurrency? Percentage of respondents Very unlikely 21.73% Somewhat unlikely 22.40% Somewhat likely 23.07% Very likely 32.80% Data source: The Ascent survey of 1,500 high-net-worth American credit card holders, conducted December 30, 2021. Wealthy respondents also said they'd be very likely to apply for a credit card that supports environmental or social causes, and there was even more agreement here than there was on crypto – a third said they'd be "very likely" to apply while less than 20% said they'd be "very unlikely." How likely would you be to apply for a credit card that focused on supporting environmental or social causes? Percentage of respondents Very unlikely 19.00% Somewhat unlikely 20.40% Somewhat likely 27.60% Very likely 33.00% Data source: The Ascent survey of 1,500 high-net-worth American credit card holders, conducted December 30, 2021.

fool.com - How Do Wealthy Americans Use Credit Cards? - The Motley Fool

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