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6 signs you're using the wrong credit card

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  • Different credit cards work better for different people, and factors like how much debt you carry and how often you travel can play a role.
  • If you've had the same credit card for a decade or longer, there's a good chance you would benefit from upgrading to a new card with better benefits or rewards.
  • Remember that you don't have to cancel an old credit card to get another, better one.
  • Visit Business Insider's homepage for more stories.

Every time I see someone whip out a mediocre rewards credit card or an old credit card that has been discontinued, I cringe. The reality is, some credit cards are better than others.

There are also times when consumers just carry the wrong type of card for their needs - or one that simply isn't serving their goals.

With so many credit cards on the market these days, you don't have to settle. If you've had your credit card for what seems like forever, here are some signs you may be due for a major upgrade.

1. You pay your balance in full every month but you're not earning rewards

If you pay your credit card balance in full each month and your credit card doesn't offer points or miles, you're leaving money on the table. You may not care about travel rewards, but you could at least sign up for a credit card that gives out 2% cash back or more.

Keep in mind that there are a lot of cash-back credit cards that don't charge an annual fee, and that some let you redeem points for statement credits, gift cards, and more.

One of my favorites is the Citi Double Cash. This card gives you 2% back for everything you buy with no annual fee - 1% when you make a purchase and another 1% when you pay it off.

2. You're earning airline or hotel points without any plans to use them

We all know that guy who has 1.5 million Hilton Honors points and no travel plans, and this scenario is double awful when someone doesn't even have a travel goal in mind. And the same is true for someone earning airline miles who has no clue if they'll be able to use them for the flight they want.

Read more: The best rewards credit cards of 2019

If you're earning rewards, you really should be intentional about the type of rewards your card offers. Go with a hotel program you already know and love, for example.

If you're unsure, you can also opt to earn points in a flexible program like American Express Membership Rewards or Chase Ultimate Rewards. That way, you can earn points now and decide how to redeem them later.

3. You're carrying a balance without considering your interest rate

Since credit cards charge an average APR over 17%, carrying a balance on a card is one of the most expensive ways to borrow money.

Instead of letting debt linger on a card with a high APR, consider transferring your balances to a 0% APR credit card. Some cards (like the Chase Slate) even waive balance transfer fees for a limited time.

If you do choose to utilize a balance transfer credit card to pay down debt, make a plan to pay your debt off so you can avoid a similar situation later on. Most importantly, stop using credit cards for purchases until you're debt-free.

4. Your card doesn't offer any consumer protections to speak of

While credit cards offered a decade ago were light on consumer protections and benefits, today's credit cards have to offer more perks to remain competitive. This means that many cards give you an array of consumer benefits for free.

As an example, the Chase Sapphire Preferred Card offers trip cancellation/interruption insurance, auto rental coverage, baggage delay insurance, trip delay insurance, roadside dispatch, lost luggage reimbursement, travel accident insurance, extended warranties, purchase protection, and more - all for being a cardholder.

If your card doesn't offer any of these benefits, seek out a new one that does.

5. You still have your student credit card from college - but you're over 30

If you still use the student credit card you received during your college years, you're probably missing out. Student credit cards can be easier to qualify for than traditional cards, but they also come with meager rewards, few consumer protections, and lower credit limits.

You can keep your student card and stick it in a stock drawer, but it's probably time to upgrade to a credit card that offers something you want.

6. You travel internationally every year and your credit card charges foreign transaction fees

Finally, don't forget to pick up a credit card with no foreign transaction fees if a lot of your travel is outside the United States. If you don't, you'll wind up paying a foreign transaction fee of 2% to 3% on every purchase you make.

That may only work out to $2 to $3 for every $100 you spend, but this fee doesn't actually get you anything. Plus, the amount you spend on these fees can add up in a big way over time. And, who wants to waste money?