They have debit cards and do go to the bank to withdraw money. Stars, they’re just like us.
This is just one of the stories from our “I’ve Always Wondered” series, where we tackle all of your questions about the world of business, no matter how big or small. Do you ever wonder if recycling is worth it or how store brands compare to name brands? Read more in this series here.
How much do movie and rock stars get paid? For example, a well-known actor made $15 million in three movies in one year. If the money is sent electronically, does it go into a bank account? Maybe to a trusted financial adviser who takes care of it and then gives the star whatever amount they want? Do the stars have debit cards and use them to get cash? This may sound silly, but I’ve always wondered.
Celebrities might get paid millions of dollars for a few months of work, but they go to the ATM just like everyone else.
A celebrity with a $15 million payday will make headlines, but we often don’t talk about where exactly that money goes and how that celebrity accesses that money.
That’s where business managers come in. They help distribute the cash among the artist’s other representatives. They pay the bills. They make sure a celebrity has sufficient funds so there are no hiccups when they go to the ATM. And they help celebrities make savvy financial choices, even if they’re swipe-happy. We spoke to business managers who broke down where the money goes after the check gets signed and how they manage their clients’ finances.
Actors and musicians often utilize a loan-out corporation that’s taxed as an S corporation. Loan-out corporations allow artists to lend their services to studios or production companies, said Lee, the founder of KLBM, which provides business management services to actors, musicians, athletes and other high-net-worth clients.
Business managers may help clients incorporate themselves if they haven’t already, said business manager Carrie Malcolm, who founded the firm CRM Management and works with actors, directors, writers and musicians.
Malcolm collects her clients’ earnings then deposits them in a corporate bank account. Those earnings used to get mailed to her by check, but since the COVID-19 pandemic, it’s usually a wire transfer.
Afterwards, Malcolm will divide up some of her client’s earnings among representatives. Some artists have agents who first handle their earnings, then split it up among themselves, the manager and the lawyer before sending the money to the business manager, Malcolm added.
Business management is as much about understanding numbers as it is about understanding people, and balancing everyone’s interests. If an actor gets paid $1 million, Malcolm said she’ll pay everybody right away. Malcolm said “nobody wants to really wait,” especially smaller managers with payroll and other expenses.
Every team is different, but generally the artist’s agent and manager might get 10% each, while their lawyer and business manager will get 5% each, Malcolm said. Artists do not have to pay taxes on the money they give to their representation because those are considered business expenses, Malcolm said.
If an actor is getting smaller checks, maybe $7,500 once a week, Malcolm will wait until the end of the month to pay her client’s representatives. “I think, psychologically, if a client sees that all you’re doing everyday is writing checks to their representatives, it’s kind of disconcerting,” Malcolm said.
Business managers will also take care of a client’s everyday bills, Malcolm said. Her clients don’t always remember which credit card to use, and what expenses are tax deductible. When an actor gets their nails done? That’s a business expense, Malcolm said.
“If you go to a bookstore and get a bunch of art books, and you’re a director, that’s research. You’re getting ideas for shots and lighting and things like that. If you’re paying for Hulu every month, that’s research too,” Malcolm said.
When it comes to buying goods and services, every celebrity has their preferred method of payment.
“Some of them are really reliant on their credit cards and prefer the points. I’ve got super points-junkie clients,” Kristin Lee said. “But then some are just addicted to their debit cards and pull out cash constantly.”
Matt Gallagher, a former business manager, said he would monitor artist’s bank accounts to ensure they always had funds to withdraw from.
“Let’s say celebrity A goes to an ATM and takes out $1,000. Part of the business manager’s job was to check those accounts on the daily and say, ‘Oh, there was a withdrawal. So I’m going to put it back to what the agreed upon amount is,’” he said.
Malcolm said her younger clients in particular like to use debit cards. “I have to kind of train them to use a credit card,” she said.
Sixty-nine percent of Gen Zers report daily or weekly debit card use, compared to 39% of Gen Zers who frequently use credit cards, according to a recent Ernst & Young survey. Younger generations might prefer debit cards because they want to “live within their means and avoid additional fees,” according to Ernst & Young.
As people’s financial habits change, business managers have to adapt. Artists use popular services like Venmo and Zelle, which means Malcolm’s bookkeepers will log into an artist’s accounts to track their expenses.
Business managers will also choose the artist’s bank. Malcolm and Lee work with the Los Angeles-based City National Bank, which has been very helpful to their clients.
“They’ll messenger cash to their apartments and not charge for messengers. They’ll cover overdrafts,” Malcolm said. “They’ll call me if something looks funny on the account.”
Most of Malcolm’s clients did not grow up wealthy, she said, so she helps them feel comfortable with their earnings and teaches them how to make savvy financial decisions. That’s because a friend might come to them with an investment opportunity.
But she’ll tell them they first need to discuss their next job, the amount of money they’ll need to maintain their lifestyle, and plans to buy a home. After all that’s settled, then they can talk about stocks.
Do Celebrities Use Credit Cards? A Look Inside Their Wallets
Celebrities have fancy lives with fancy cars, clothes, and trips. But when it’s time to pay, do they use credit cards like everyone else, or do the rich and famous have a different way of paying? Let’s look into how celebrities spend their money and find out if stars even carry credit cards.
The Short Answer
Yes, celebrities do use credit cards! Although celebs have access to large bank accounts, they still use credit cards for convenience and to earn rewards. High-end and exclusive credit cards are popular among celebrities, but regular Visa, Mastercard, and Amex cards also appear in their wallets. Celebrities face the same quandaries as us when deciding which card to use for different purchases.
Digging Deeper into Celebrity Credit Card Use
While celebrities have seemingly endless wealth, they still rely on credit cards for convenience and benefits just like average consumers. Here are some key insights into how the stars pay:
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Celebrities use credit cards every day. Stars often use credit cards to buy things like coffee, Uber rides, and things to shop online. Carrying cash for small routine purchases isn’t practical.
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Exclusive cards come with nice perks—a lot of famous people have high-end cards like the American Express Centurion (or “black”) card, which comes with nice perks and elite status. But these cards usually have very high annual fees.
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Rewards Cards Maximize Their Spending Power – Celebrities rack up points and miles quickly with their heavy spending. Rewards cards like the Chase Sapphire Reserve are popular for getting the most bang for their buck.
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Regular Cards Suffice for Many – While celebrities love the prestige of elite cards, plenty still carry “regular” Visa, Mastercard, Amex, etc Top-tier cards have massive income and spending requirements
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Bad Credit Plagues Some Celebs – Despite their wealth, a surprising number of celebrities still have bad credit, often due to poor money management. Some carry subprime credit cards with high APRs and fees.
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Celebs Juggle Multiple Cards – There’s rarely one “perfect” card, so many celebrities juggle 2-3 different cards depending on the purchase. This maximizes rewards and benefits.
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Specialty Cards for Business Expenses – With huge entourages and staffs, stars often use small business credit cards to keep track of work-related expenses.
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Brand Loyalty and Sponsorships – Celebs frequently carry credit cards from brands they endorse and have sponsorships with. But they aren’t necessarily their main cards.
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Details are usually taken care of by assistants; celebrities may not deal with their own monthly bills and choosing which credit card to use. A lot of the hard work is probably done by their business managers and assistants.
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Credit Cards Used Strategically – Savvy celebs don’t carry balances and use techniques like 0% balance transfers strategically. They aren’t racking up interest charges.
Examples of Celeb Credit Cards
So which specific credit cards do the stars carry in their designer wallets? Here are some standout examples:
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American Express Centurion Card – This uber-exclusive black card is invite only and beloved by celebs, reportedly including Oprah, Kim Kardashian, andTom Cruise.
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Chase Sapphire Reserve – Actors Ben Affleck and Halle Berry have been spotted with this popular travel rewards card.
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Citi Chairman Card – Kanye West whips out this exclusive Citi card which requires investments of over $1 million with the bank.
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Orchard Bank Credit Card – Despite her wealth, Lindsay Lohan has made headlines for carrying this card which is aimed at subprime borrowers.
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Visa Black Card – Both Lady Gaga and Elvis Presley have carried the high-limit multi-currency Visa Black Card.
The Takeaway
It’s clear celebrities do rely on credit cards, albeit with more exclusivity and luxury perks than us average joes. But at the end of the day, famous people face the same decisions about which card to use and how to maximize rewards. Stars are just as strategic as us with their payment choices, albeit with a lot more zeros involved. So next time you see a celebrity flaunting their latest purchase, remember plastic played a role behind the scenes!
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What Credit Cards Do Celebrities Use? – CreditGuide360.com
FAQ
Which credit cards do celebrities prefer?
The Amex Green Card and the Gold Rewards Business Card are the most popular preferred credit cards among celebrities. None of the celebrities on the list have the American Express Centurion Card, better known as the “Black Card. ” Some celebrities have business credit cards. (American Express is a WalletHub partner).
Do celebrities use American Express credit cards?
19 of the 27 celebrity wallets that were looked at in “Celebrity Credit Cards: Inside the Wallets of the Stars” have an American Express credit card in them. The Amex Green Card and the Gold Rewards Business Card are the most popular among them.
Do the wealthiest people need credit cards?
You wouldn’t imagine that the wealthiest people need to use credit cards, given how much liquid cash many of them seem to have at their fingertips. But they do — just not necessarily at the same level of credit that most of us use. Not all credit cards are built alike, or even on a level that most could ever imagine using.
Are all credit cards built the same?
Not all credit cards are built alike, or even on a level that most could ever imagine using. The credit cards on this list are quite possibly the most exclusive and elite credit cards in use, requiring wealth beyond the average American’s dreams and providing perks that match the fees they require.
Do celebrities pay with credit cards?
When it comes to buying goods and services, every celebrity has their preferred method of payment. “Some of them are really reliant on their credit cards and prefer the points. I’ve got super points-junkie clients,” Kristin Lee said. “But then some are just addicted to their debit cards and pull out cash constantly. ”.
Do millionaires use credit cards?
Yes, millionaires widely use credit cards. A lot of millionaires use credit cards because they are easy to use, come with rewards, and offer extra benefits like travel rewards and purchase protection.
What kind of credit card do celebrities use?
The American Express® Centurion Card holds cult celebrity status, even among other premium credit cards. This high-end credit card is sometimes called the “Black Card,” and only the most frequent spenders can get it through a direct Amex invitation.
What credit card do most billionaires use?
- The American Express Centurion Card.
- J.P. Morgan Reserve Card.
- Dubai First Royale Mastercard.
- Coutts World Silk Card.