5 Credit Card Habits of Successful People

Seems like the rich are different than the rest of us, and it’s not just in the way they handle money. They also handle credit cards differently. Tom Corley, author of the best-selling book Rich Habits: The Daily Habits of Successful People, has been studying the habits of wealthy people versus poor people and has uncovered some stark differences in the way they handle credit cards. Here are five:

1. They Use Fewer Credit Cards

In Corley’s research, he found that only 8% of rich people used more than one card, while 77% of poor people did. “Successful people only use one or two credit cards,” says Mikelann Valterra, a money coach and co-founder of MoneyMinderOnline.com. “They don’t spread their spending around. The more cards you use, the more of a money fog you are in. Successful people know this.”

2. They Pay Their Balances in Full

While 90% of poor people in Corley’s research carried balances, only 5% of rich people did. In fact 88% of the poor in his survey carried credit card balances larger than $5,000 while only 5% of the rich had large balances. They likely know that credit card debt is expensive, and that you can improve your credit score without debt.

Of course, another explanation is that the rich have more disposable income and therefore are able to pay their bills in full, while others carry debt because they have difficulty paying for their monthly expenses. But planning can help, too.

“Successful people save money every month for “periodic expenses” like car repair and property taxes,” says Valterra. “That way they are never caught carrying a balance on their credit card, just because their purchases in a particular month were unusually high due to these periodic expenses.”

3. They Pay on Time

Sixty-seven percent of the poor had at least one late payment in the last year, while the rich survey respondents had none. Again, this can be the result of having the cash flow to pay on time, but sometimes it’s simply a matter of developing the habit of paying on time. This habit pays off in a number of ways. Cardholders avoid expensive late fees and build high credit scores, which in turn help them get lower interest rates when they do borrow.

Paying on time is what Corley calls a “Rich Habit,” and in his book Rich Kids: How to Raise Our Children to Be Successful and Happy, he writes: “The key to happiness and success in life is to make sure that more than 50% of your daily habits are Rich Habits. When more than 50% of your daily habits are Poverty Habits, it tips the seesaw in the wrong direction and life will be unhappy and you will struggle financially.”

4. They Use Reward Cards to Their Advantage

When it comes to reward points or dollars, 81% of the rich said they had them, while only 9% of the poor did. Cardholders who use reward cards and pay the balances in full come out ahead; they truly get something for nothing. But that doesn’t mean they overspend just to earn rewards.

“Successful people track their credit card spending so they don’t lose track of what they spend,” Valterra says. “They understand that people tend to spend more when they use a credit card, and so to combat this natural tendency, they plan their spending and then track their credit card purchases to stay in touch with their spending.”

5. They Know Their Credit Score

Corley found that 77% of the rich knew their credit scores, while only 5% of the poor did. This may not be a credit card habit per se, but it’s closely related. Knowing their credit scores allows the the rich to take advantage of the best deals, including premium reward cards, and to spot problems quickly — including identity theft. (Consumers can get a free credit score updated every 14 days on Credit.com.) It can also reinforce good habits: a strong or upward trending credit score tells them they are on the right track.