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Do You Have a Bad Credit Card?

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Yes, your credit card could be bad for you, but not in the way you think. Sure, you can get into some serious financial trouble if you use plastic poorly. But when we talk about bad credit cards, what we’re really talking about are credit cards that are a bad fit for you. (As Shakespeare wrote, “There is nothing either good or bad, but thinking makes it so.”)

We each have our own spending and saving habits. Some people are prone to carrying a balance on their credit cards. Others regularly pay their balances in full — and should reap the rewards. There are also cards that serve a specific purpose. Carrying a high-interest balance? You’ll want to look into a balance-transfer credit card. Need to rebuild your credit? A secure credit card might be your only option.

Finally, your credit score plays a big role in which card should — or could — be in your wallet. Basically, the better your credit, the better the terms for which you’re eligible. Have no idea where you might fall? You can view two of your free credit scores on to find out. We’ll also help you find credit cards that best match your credit score.

Why Is it Bad to Have a Bad Credit Card?

If your financial habits don’t make sense for the credit cards you’re using, you could be wasting money. Let’s go back to rewards credit cards for a moment: Yes, points, miles and cash back are alluring, but to compensate for that payout, issuers usually attach higher annual percentage rates (APRs) to their premium plastic. So, if you carry a balance routinely, you’d be negating any rewards you earn with interest — and then some. In that case, you would probably be better served by a low-interest credit card. On the flip side, if you always pay your balance off on time, you’d be leaving dollars on the table by opting for a card that doesn’t give you any kickback.   

How Do I Know I Have a Bad Credit Card?

If you’re paying high fees or exorbitant interest rates, it’s worth rethinking what’s in your wallet — particularly if your credit score is in good shape or has improved significantly since the last time you went card shopping. (If it hasn’t, we’ve got some tips for how you can raise your scores.) Beyond that, here are some other ways to know if you’re using the wrong credit card.

  1. You carry a balance and pay a high interest rate. Do you carry a credit card balance? A card with a high interest rate is not the best option for you. It doesn’t matter what other bells, whistles, perks, and rewards a card might offer.  If you carry a balance, you need a card with the lowest possible APR for your credit score.
  2. You’re paying more for an annual fee than you earn in rewards. There are plenty of excellent credit card offers out there filled with perks and rewards that don’t charge an annual fee. Now, if you love your card, use it frequently, have done the math and found the rewards and perks are more than the annual fee, keep right on spending. But if you aren’t in love with an annual-fee credit card, you may want to look for a better option.
  3. You don’t (or can’t) use the rewards you earn. This can often arise with travel credit cards, which are a huge hit for frequent fliers but sometimes leave homebodies wondering what to do with all those miles and points. If you pay your balance in full every month and earn rewards, but never use them, you may want to opt for a rewards credit card that offers cash back or statement credits. This way, you can get the cash you’ve earned and use it for whatever you like.

I Know What Type of Card I Should Have. Which Ones Are Good?

That answer will also vary from person to person, based on spending habits, specific needs and even income level. (A $450-annual-fee credit card might be a big boon to major spenders, but an unnecessary expense for people on a tight budget.) Having said that, there are some cards that stand out from their peers. You can find our picks for the best credit cards of 2018 in all major card categories (and then some).

Lucy Lazarony contributed reporting to this article, which has been updated. It originally ran on March 12, 2015.

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