One data point from my Rich Habits Study that I discovered interesting was about bank cards. I asked the self-made millionaires in the event that they used bank cards and 93% said they did, but only bank cards that had bonus money or points attached to the cardboard.
Your preferred bank card? By far the preferred bank card of 79% of self-made millionaires.
Why were rewards so vital for self-made people?
Since 97% of self-made millionaires paid off their bank card balances every month, the credit line offered by the bank cards obviously wasn’t price much. However, the reward dollars were free money that might be exchanged for goods and services provided by the bank card firms, retailers and repair partners.
For example, with American Express, you possibly can redeem your reward dollars at Barnes and Noble retailers. I experienced the worth of those reward dollars first hand when my oldest son went to varsity and Barnes and Noble had a bookstore on campus. At that Barnes and Noble, my son was in a position to purchase his college books, shampoo, clothing, and lots of other college items.
When I saw the worth of this during his freshman yr of school, I redeemed $500 in American Express Rewards money each semester for Barnes and Noble gift cards and gave them to my son to purchase books and sundries for school. I did the identical when my youngest daughter went to varsity.
By my calculations, this saved me about $5,800 for each of my children: $8,000 in savings from the free Barnes and Noble gift cards, minus the cumulative American Express annual fee of $2,200 ($275/yr x 8 years).
85% of the self-made millionaires in my study said they incessantly make large purchases with their rewards bank card simply to earn bonus points. In fact, one among the self-made millionaires in my study even bought two latest cars along with his American Express bank card simply to get the $800 bonus points.
Many of the self-made entrepreneurs in my study reported that they used their rewards bank cards to pay for business-related expenses for suppliers, accumulating several thousand dollars in bonuses annually that they might use for quite a lot of purposes.
I learned that rewards bank cards were a source of free money for the self-made millionaires in my office, and that, my friends, is a really smart money habit.
