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Signs Your Current Credit Card is Not Working For You

BY Team Loanstreet

Updated 19 Oct 2018

Choosing the right credit card can be a difficult task. You should always research and compare credit cards to find the one that best suits your needs. However, sometimes you get a credit card and you're not sure if it was a good choice after all. Over the years, you may experience increasing credit card costs without being able to put a finger on where you are going wrong. Take a look at the following points to find out whether your credit card is working for you or not!

What's covered in this article?

High annual fees and penalties

First off, look out for any hikes in annual fees and unexpected recurring charges. It’s a bad sign if you are charged with hefty penalty fees when you go even slightly over limit or miss a monthly payment even by as little as one day. The charges to look out for are as follows:

  • Cash advance fees: Your credit card company may be happy to help you if you find yourself in desperate need of cash by providing you with a cash advance facility, but the service comes with a fee that normally costs between 2% and 5% of the amount borrowed, in addition to an extremely high interest rate being charged immediately as there is no interest-free period on cash withdrawals.
  • Balance transfer fees: Some credit cards charge up to 3 or 4 percent of your balance for each balance transfer whereas there are many credit cards that don’t charge a balance transfer fee at all. It would be wise to use one of the latter type of credit card if you find yourself needing to perform balance transfers often.

Your Rewards Aren’t Very Rewarding

One of the most attractive features of a credit card is usually the rewards program. However, depending on your lifestyle and the company you’re signed with, your card may or may not be giving you the best bang for your buck. It’s quite common for cards to have extremely attractive rewards during the first year, only for those rewards to taper off significantly after that. This is a common tactic used to lure you in and make you apply for a card, but one which may ultimately be detrimental to your satisfaction. Make sure to check the rewards plan thoroughly before committing to a card.

It’s also important to know what kind of rewards suit your lifestyle. Suppose that your card provides an excellent travel points system which sounds very tempting, but you don’t travel enough to fully utilize it. Instead, you often stay in your home city and make your own meals. In this case, you should sit down and consider whether or not your card adapts to your lifestyle goals. Perhaps a cashback card would be more favorable? Make sure to take this kind of thing into account when looking into credit cards. A credit card can actually save you money in the long run, but only if you use it wisely! Take a look at Loanstreet’s credit card section to familiarize yourself with the different kinds of cards and their terms. 

High foreign transaction fees

Overseas fees aren’t something you will normally concern yourself with when you sign up for a credit card. Well, not unless you are a frequent traveller. If you are one, then it’s definitely important that you make sure your foreign transaction fees are manageable. Make sure to find out how much your credit card charges you for transactions made abroad, as this can go as high as 3% of the amount transacted.

You should also watch out for the cash advance fees on ATM overseas as this normally comes with a fee of 5% per transaction. On top of that you’ll also be charged the highest annual interest rate the bank offers. If you’re a regular traveller, or you plan to use a credit card for your transactions on your next holiday, consider whether or not your current credit card is suitable for you. It may be a good idea to sign up for a credit card with good travel benefits instead.

Excessive Interest Rates

Many credit card companies trick you to sign up for their card by offering a low introductory interest rate, which dramatically increases once the introductory phase expires. If you’ve found that your current credit card expenses have suddenly spiked for no apparent reason, this may be the cause. Thus it’s very important that you find out about these details that you may have missed when you first read about the credit card.

You may also find yourself paying effectively more on your credit card purchases then the list price of every item you buy. Unpaid balance in your account may be dragging you down with high interest cost outweighing the benefits you receive. If you face any of these problems, it may be a sign that your current credit card isn’t working out for you.


Don’t panic if you observe similar signs with your current credit card. Rather, if you are familiar with the signs explained above then it must be time for you to move on! Remember, do your research, and make sure to compare different credit cards to get the best deal!


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About the Author

Team Loanstreet

Run by a professional human-sized team, get resourceful tips & guides from our very own library of financial articles that can help improve your financial lifestyle & make a well-informed money decision. We strive to provide you with the best service in helping you to get the most out of that DUIT!


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