The Credit Card 'Upper Class' People Are Less Likely To Have Compared To The Average American

Folks in the upper class love credit cards. Many of them even pay thousands of dollars a year for highly exclusive cards like the American Express Centurion. But according to an analysis from the Motley Fool on how rich Americans use credit cards, individuals with net worths over $1 million are less likely to have cash-back cards compared to the average American. According to the analysis, only 59% of upper-class individuals have a cash-back card compared to 72% of Americans with net worths under $1 million.

Cash-back credit cards have become the most common type of credit cards by operating on a simple but effective strategy. Every time someone swipes their card for a purchase, the bank pays you a percentage of the money spent. Besides allowing you to redeem your cash at the end of the statement cycle, these cards also provide little-known perks like rental car insurance or mobile phone protection. But for rich Americans, the possibility of earning a couple hundred dollars a year in cash-back is not enticing or beneficial to their wealth. Instead, they opt for cards with rewards that better suit their lifestyle.

While they may not have cash-back cards, upper-class people have a variety of other cards in their wallets. According to The Motley Fool, rich Americans are more likely to have travel rewards cards and ones with a sign-up bonus when compared to the average person. While they might seem like a random pairing of credit cards, they are a more strategic option than getting cash-back rewards. Travel cards, for example, allow individuals to redeem their points for luxury upgrades like flight upgrades, free hotel nights, or discounted airfare. These rewards may have high redemption costs, but rich individuals are more likely to use credit cards for the majority of their purchases, making such rewards more attainable.

Credit cards with sign-up bonuses are also part of a strategy used by the wealthy to maximize their rewards. Known as credit card churning, individuals with good finances and credit will consistently open new credit cards just to qualify for their lofty sign-up bonuses. For example, the American Express Platinum, the second most expensive credit card, has a sign-up bonus of 175,000 Membership Rewards points, which can be used for travel or converted to $3,500, according to ThePointsGuy. So, while rich Americans may be less likely to have cash-back credit cards, they still benefit from lucrative rewards in other ways.