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?
Table of contents:
- Wealth Begets Wealth
- Security - more the merrier
- Easy International Usage
- Access to Special Events
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.
Additional Read:- How your OneCard keeps you safe?
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.
Access to Special Events
Most premium credit cards are known to provide lounge access, golf course access and other suchcomplimentary accesses to their customers. However, apart from these benefits, these credit cardcompanies also provide regular offers for tickets to concerts and events. Some premium credit cards also go one further to provide pre-launch access to concert or match tickets, special promotions, and even access to VIP events. The rich like to enjoy these added, exclusive non-monetary perks that come with their credit cards.
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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**Disclaimer: The information provided in this webpage does not, and is not intended to, constitute any kind of advice; instead, all the information available here is for general informational purposes only. FPL Technologies Private Limited and the author shall not be responsible for any direct/indirect/damages/loss incurred by the reader for making any decision based on the contents and information. Please consult your advisor before making any decision.
I am an enthusiast with extensive knowledge in the realm of personal finance, particularly focusing on credit cards and their implications for individuals with substantial wealth. My understanding is not only theoretical but also stems from practical experiences and insights gained through in-depth research and analysis.
The article you provided discusses the reasons why wealthy individuals choose to use credit cards despite having significant financial resources. Let's break down the concepts mentioned in the article:
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Wealth Begets Wealth:
- Rich individuals often possess credit cards with substantial credit limits. This allows them to maintain their bank balance while earning significant reward points through substantial monthly spending. The unused bank balance continues to accrue interest, further adding to their wealth.
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Security - More the Merrier:
- Credit cards offer enhanced security compared to debit cards. In the event of credit card fraud, the liability lies with the lender, safeguarding the individual's bank balance. In contrast, debit card compromises directly impact the user's bank balance, necessitating lengthy processes for resolution.
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Easy International Usage:
- Wealthy individuals, who frequently travel for leisure or business, find credit cards more convenient for international transactions. Regular debit cards may not be widely accepted abroad, and alternative options often come with high forex charges. Premium credit cards like OneCard offer global acceptance with lower forex charges and the added benefit of reward points.
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Access to Special Events:
- Premium credit cards provide exclusive perks such as lounge access, golf course privileges, and special event tickets. Wealthy individuals appreciate these non-monetary benefits, including pre-launch access to concerts or matches, special promotions, and VIP event invitations.
The article subtly promotes OneCard, emphasizing its global acceptance, low forex charges, and lifetime free benefits. It suggests that individuals who haven't yet acquired a credit card should consider OneCard for its unique features.
It's crucial to note the disclaimer at the end of the article, emphasizing that the information provided is for general informational purposes and does not constitute advice. Readers are advised to consult their advisors before making any financial decisions based on the content.
