A shopper pays cash for sales merchandise December 26, 2000 at the Lakeline Mall in Austin, Texas. Stores were hoping that after Christmas shopping could salvage what seems to be a disappointing holiday season. (Photo by Joe Raedle/Newsmakers)

Define “rich.” Being a millionaire or billionaire? Or is rich being able to live your life on your terms? It doesn’t always mean being able to jet off to Paris for lunch.

Contrary to popular belief, the rich don’t spend money like drunken sailors each day. Most are very conservative with their money. Few own multiple houses or yachts. The vast

majority of the wealthy spend their money on family experiences not depreciating “stuff.”

One of the many ways the rich stay rich is the way they handle credit. Most American’s abuse their credit and particularly credit cards. The rich are very conscious of the damage poor money management and misuse of credit can create.

Some Things The Rich Do That You Don’t

When it comes to credit cards the rich rarely violate the hard and fast rules of credit card management. Here are some of the ways they keep more in their pockets.

1.)  They look for credit cards that give cash back or reward points for making purchases. Paying cash at the pump is fine but why not pay the same cash at the end of the month and get more buying power in the process?

2.)  Don’t pay credit card interest. I recently bought a pricy new computer. It came with a credit card offer that if I pay it off within 18 months there is no interest. This was a no brainer for me. Rather than pay 18-28 percent interest I get to pay overtime without add on interest charges.

3.)  Your Credit Score: Most people score in the mid-600s with their credit score. It would be much better if you could get your score to over 700-750 or higher.
You many not realize but your credit score can affect how much you pay for car insurance, a mortgage, healthcare insurance, and can affect your employment opportunities. The rich pay credit card bills on time, pay more then the minimum, and keep their balances low or at zero.

4.)  The rich don’t max out their credit cards. They know that keeping their balances at 30 percent or lower can favor them if they need emergency loans or other quick cash. They will also have more favorable rate on car and health insurance, mortgage rates and more as stated above.

5.)   They know the value of having multiple cards. This is another “red flag” area for many people. They get several cards and max them all out buying “stuff” and then go broke trying to pay them off with minimum monthly payments.
Having multiple cards is an advantage because you are able to raise your credit limits and have more available credit over time. Plus paying on time shows potential lenders your creditworthiness when the time comes to borrow for larger purchases like homes or land at better than credit card rates.

Some Final Thoughts

I can tell you from personal experience, being debt free, or almost debt free sure makes sleeping easier. Your life is less stressful and your home life is much happier.

Money is often the genesis of many an argument between couples and really doesn’t have to be.

Knowing that if the furnace goes out, or the car breaks down, there are available funds to handle those emergencies if needed.

Make a plan to increase your income by using cash back cards. It’s nice to treat yourself to something now and then by spending your points.

Set spending limits each month so you can keep your available credit in tact. A good nights sleep is worth it.