Your credit card is a powerful tool for fraud protection and rewards. But in the wrong situation, it becomes a debt trap. Here are seven places to think twice before swiping.
1. Funding a Buy Now, Pay Later Plan
Linking a credit card to BNPL services like Klarna, Affirm, or Afterpay stacks high-interest debt. Miss a payment and you owe both the BNPL provider and your card issuer. Most BNPL users have subprime credit, and many take out multiple loans simultaneously.
2. Anywhere with a Credit Card Surcharge
A growing number of businesses add a 2% to 4% surcharge for credit card use. This wipes out any rewards you earn. On a $5,000 contractor bill, a 4% fee costs you $200. Always ask for a cash or debit discount.
3. At the Gas Pump
Gas pumps are the top target for skimming devices. The Secret Service removed 411 illegal skimmers in 2025 alone. Use tap-to-pay or your phone's digital wallet instead of swiping. If those aren't available, pay inside.
4. To Buy Cryptocurrency
Most issuers treat crypto purchases as cash advances, triggering a 3% to 5% fee and an immediate APR near 30%. Combined with exchange fees, you could pay 8% before the market even moves. Use a bank transfer instead.
5. For Person-to-Person Payments via Venmo or Cash App
Many banks now classify P2P transfers as cash advances. Sending $500 could cost $40 in fees plus immediate interest. Fund these transfers from your bank account or use Zelle.
6. On Anything from a Social Media Ad
Nearly 30% of scam losses start on social media, totaling $2.1 billion in 2025. Fraudsters use the same ad tools as legitimate businesses. If you see a deal, navigate directly to the brand's website rather than clicking the ad.
7. For a Free Trial You Might Forget to Cancel
The FTC's Click-to-Cancel rule was vacated in July 2025, making cancellations harder. Handing over your card for a trial can lead to months of recurring charges. Set a calendar reminder or use a virtual card number.