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3 Reasons why rich people use credit cards

3 Reasons why rich people use credit cards

It was a weekend, so it either called for a party or being a couch potato while binge-watching a random series which I’ll eventually never complete. I chose the former but as always, I didn’t have clothes when I needed them the most, so I decided to go shopping.

I still don’t know why but I decided to visit one of those posh malls, the ones which have only high-end international brands and even a cup of coffee would cost more than my week’s grocery spends. I entered one of the stores, and checked the price tag, 15,000 for a shirt? So to save face, I ended up picking a handkerchief. That’s the only thing I could afford there. At the counter, a guy was getting his stuff billed, which was worth more than a lakh, no kidding. But then I noticed something peculiar. He was using his credit card for the payment! I thought to myself, “he looks super-rich, why does he need a credit card?” He must have a fat bank balance, right? The curiosity got me thinking, and here’s what I found.

So, why do rich people use credit cards anyway?

Wealth Begets Wealth

This goes without saying, rich people have a huge credit limit and they end up carrying multiple cards as well. As their monthly spending on their credit card is a lot, not only do they end up earning huge reward points but also their bank balance remains untouched so they earn interest on that as well. Eventually, some of them end up earning more than what we spend in a year on our credit cards.

Security - more the merrier

Credit Cards are more secure than debit cards. From their pov, if their credit card is compromised, for no fault of theirs - the whole liability is with the lender and the proceedings will run their due course but their bank balance isn’t affected. Whereas if their debit card is compromised, your bank balance takes a big hit directly. Then one needs to report it to the bank and the bank will run its checks and processes which can take months for your money to return.

Easy International Usage

We know the rich travel a lot. Be it a leisure outing or a business one, travel is always on the cards. Mostly the regular debit cards aren’t accepted abroad. One has to go for niche savings accounts with multiple terms and conditions and not to mention high forex charges too. On the flip side, the acceptance of credit cards is way higher than that of debit cards (how widely accepted depends on which card one has but it will beat your debit card ). OneCard, is a credit card, with global acceptance and just a 1% forex charge which is one of the lowest in the industry. Moreover, you get to earn reward points as well which never expire - so essentially it’s a bang for your buck as it’s lifetime free.

And that, my friend, are some key reasons a credit card is used even when one has money in their account. About the handkerchief I purchased earlier in the story, I’ve framed it on my wall for being my costliest handkerchief possession ever.

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-   OneCard , June 29, 2022

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