Your credit card is the most useful piece of plastic in your wallet — until it’s not.
In the right hands, it’s fraud protection, rewards, and a 21-day interest-free loan. In the wrong state, it’s a loan trap, a scam funnel, and an instant 30% annual percentage rate (APR).
I’ve been a CPA since 1980, and I’ve watched people destroy their finances one by one for decades. The nets have changed. Today’s worst credit card mistakes wouldn’t have been possible even 10 years ago — they include apps, scams, and surcharges that didn’t exist then.
Here are seven places where you should think twice before removing a card.
1. Buy now, pay later financing plan
Buy now, pay later (BNPL) services like Klarna, Affirm and Afterpay are everywhere. The Richmond Federal Reserve estimates that BNPL transactions will reach approximately $70 billion in 2025, growing about 20% per year since 2021.
This is the catch. When you link a credit card to your BNPL account, you are accumulating high-interest debt on top of the installment loan. Missed a $400 payment? Now you owe it to Klarna And Interest on both your credit cards is increasing.
The Consumer Financial Protection Bureau found that most BNPL users have subprime or deep subprime credit scores, and 66% of users hold multiple BNPL loans simultaneously. Read about the hidden risks of buy now, pay later before you sign up for another plan.
This is not a smart-shopper tool. This is a pile of debt.
Smart move: Pay off BNPL balances from your checking account, or skip BNPL altogether.
2. Flashing Credit Card Surcharges Anywhere
An increasing share of small businesses now depend on credit card surcharges. Restaurants, gas stations, contractors, even some medical offices – they’re adding 2% to 4% to your bill just for using plastic. According to Payments Dive, interchange fees reached a record $187.2 billion last year, or about $1,200 for the average family, and merchants are passing more of that cost on to you.
On a $200 dinner, the 4% surcharge costs $8. On a $5,000 contractor invoice, that’s $200 less.
That surcharge wipes out almost all the rewards your card pays you. The 2% cash-back card that earns you $4 on $200 in fees was swallowed whole by an $8 fee.
If a merchant is charging a surcharge, ask if there is a cash or debit discount. Pay this way and pocket the difference. Your rewards are not worth the 4% tax.
3. At the gas pump
The FBI estimates that credit card skimming fraud and fuel theft cause losses of more than $1 billion each year. And in 2025, the US Secret Service and its law enforcement partners removed 411 illegal skimming devices, preventing an estimated potential loss of more than $428 million.
Gas pumps are the No. 1 target. They’re out there, often unnoticed, and crooks can set up a skimmer in under a minute.
When you swipe at the pump, you could be handing over your card data to organized crime gangs. Secret Service investigations have linked American skimming operations to sophisticated international criminal organizations in Eastern Europe and Latin America.
Here is the solution. Use tap-to-pay or your phone’s digital wallet – Apple Pay or Google Pay. They generate one-time codes that are useless to the thief. If none are available, pay inside. Your number gets cloned in an additional 90 seconds.
Quick gut-check – If your money advice is coming from random online influencers, you’re playing a dangerous game. I’ve been a CPA since 1980 and have been writing about money since before the Internet existed. Sign up for the free Money Talks newsletter and get time-tested expert advice.
4. To buy cryptocurrency
Do you want a quick way to lose money before you even buy the property? Keep your crypto purchases on a credit card.
According to Bankrate, most major issuers either block crypto purchases outright or treat them as cash advances. Those that allow it hit you with a cash advance fee that is typically 3% to 5% of the transaction, plus a cash advance APR often close to 30% that starts accruing immediately.
There is no grace period. Interest starts from the day of purchase. Additionally, exchanges typically charge around 2% or more in processing fees. You may have to pay 8% in combined fees before the Bitcoins can move.
Use an Automated Clearing House (ACH) electronic transfer or debit card. Even better, ask yourself if you should borrow money on plastic to gamble.
5. Send money to someone via Venmo, Cash App or PayPal
Sending your friend $300 for rent via Venmo? If you fund it with the wrong credit card, your bank may treat it as a cash advance.
According to NerdWallet, Chase added “person-to-person money transfer” to its definition of cash-like transactions in 2021. Bank of America, Capital One, Citi, Wells Fargo, US Bank, and Barclays adopted similar behavior for P2P payments.
This means Venmo has a 3% credit card fee. And Cash advance fee from your bank (usually 5% of the advance or $10, whichever is greater, per Kiplinger) And Interest accrues on cash-advance APR from day one.
Sending $500 to a friend could cost $40 or more in fees and interest alone. American Express and Discover currently code Venmo P2P transfers as regular purchases, but if you’re using something else, fund the transfer from your bank account or debit card. Or use Zelle, which doesn’t accept credit cards at all.
6. On anything found through social media advertising
The Federal Trade Commission (FTC) reports that, in 2025, nearly 30% of people who lost money to a scam said it started on social media, with reported losses reaching $2.1 billion – an eightfold increase since 2020.
Facebook alone faces $794 million in reported losses in 2025. This is far more than what people have lost from text or email scams.
Scammers use the same ad-targeting tools that genuine businesses use. The “60% off” deal on Facebook isn’t always what it claims. This could be a fake site that takes your card information, doesn’t send anything, and closes before the chargeback comes through.
It’s the hard truth: Credit cards offer the best fraud protection of any payment method. But this protection only applies after you’ve reported the fraud, disputed the charge, and waited weeks for a resolution.
It would be better not to use the card in the beginning. If you see a deal you can’t ignore on social media, leave the platform. Open a new browser tab and go directly to the brand’s official site. If the deal isn’t there, it’s not real.
7. You Can Forget to Cancel for a Free Trial
Free trials are one of the oldest loopholes in retail, and the rules have gotten even looser. On July 8, 2025, the U.S. Court of Appeals for the Eighth Circuit struck down the FTC’s “click-to-cancel” rule, which was intended to make cancellation as easy as signup.
This does not mean that every service is questionable. But that means the burden is on you. The FTC has taken enforcement actions against Match.com, Chegg, and Amazon for making cancellations harder than signups, and such cases keep coming.
When you submit your card for a “$0 trial,” you authorize recurring charges that can go on for months before you notice. Many Americans pay for subscriptions they no longer use, sometimes for years.
If you must sign up for a free trial, set a calendar reminder two days before it ends. Even better, use a virtual card number from your bank – most major issuers offer them, and you can turn one off in seconds.
bottom line
Your credit card is not the enemy. When used correctly, it’s the safest, most profitable way to pay for almost anything. But in 2026, “using it right” means knowing when the price of plastic is more than you can pay.
If you’re already feeling the pressure, you’re not alone. “Pay attention to the 11 signs you have too much credit card debt” and consider a credit counselor before things get worse.
national debt relief One of the most respected providers of debt relief in the U.S. They have helped over 500,000 people. You simply fill out a form on the company’s website, then a debt coach will call you to learn more about your situation.
If they can help you, they’ll set you up with an affordable plan that works for you – and give you an estimate of when you can expect to be debt-free. There are no upfront fees and no obligation to get started.
The seven traps above are not theoretical. They are how Americans lose billions of dollars every year, sometimes a few dollars at a time, sometimes thousands of dollars in one bad transaction.
Stay sharp. Keep your card in your pocket when the situation requires it.