11 times using your credit card is a bad idea

Reaching for your credit card is second nature for many purchases, flights, coffee, and online shopping. Cards offer speed, convenience, and rewards. But knowing when to swipe and when to hold back is key to protecting your finances and making the most of your benefits.

Used strategically, credit cards can deliver valuable perks like fraud protection, travel insurance, and cash-back rewards. Used at the wrong time, they can cost you in fees, interest, or even stolen personal data. Let’s look at both sides.

When you should avoid using your credit card

Navigating everyday purchases and financial decisions is easier when you know what pitfalls to avoid. Here are 11 times when it’s better to leave your credit card in your wallet:

1) When you’re already carrying a high balance

Using a card that’s nearly maxed out might not seem like a big deal until your next statement shows how much interest has stacked up. Credit card companies calculate interest using your average daily balance. That means every new charge adds to the total and increases how much you owe. Any rewards you earn are quickly outweighed by the cost of carrying debt.

If you’re having trouble paying down your balance, it’s worth considering a balance transfer card with a 0 percent introductory APR.  These cards give you breathing room to catch up without interest piling on top: Best Balance Transfer Credit Cards 2025

2) On unsecured or sketchy websites

If a website looks poorly built, has no customer reviews, or lacks a secure “https://” connection, your credit card information may not be safe. Scammers often build fake retail sites to capture your payment info.

Before you check out, look for a padlock icon in the address bar and check the site’s refund and contact policies. You can also use virtual card numbers, Apple Pay, or PayPal, which help mask your real card details and limit exposure if your data is compromised.

3) To pay rent or taxes (when there’s a fee)

Large payments like rent or taxes may seem like a good way to earn rewards. But if there’s a 2-5% processing fee, you’re likely spending more than you get back. For example, a 3% fee on a $2,000 rent payment adds $60 to your bill.

Unless you’re hitting a sign-up bonus or using a card with an unusually high cash-back rate, it probably isn’t worth the extra cost. It’s smarter to pay by bank transfer or debit if there’s no fee involved.

Not sure if your rewards justify the fee? Compare top-performing options here: Best Cash-Back Credit Cards 2025

4) When a deal seems too good to be true

That $200 product being advertised for $29 might be a scam. Fraudsters often set up fake online stores with huge discounts, just to steal your card details. Sometimes you’ll get a low-quality product, but in many cases, you’ll get nothing at all.

If a deal looks suspicious, search the retailer’s name along with the word “scam” and read customer reviews. Stick to shopping through official websites, not links from social media ads.

5) When shopping at a merchant you don’t trust

If a site has no return policy, unclear contact information, or awkward language, it could be risky to shop there. You might receive a knockoff item or nothing at all. In some cases, the site may just be a front to collect credit card numbers.

If you’re booking travel or making a large purchase, use a credit card that offers built-in purchase protections and fraud alerts. Some travel cards include extra benefits like trip insurance and lost baggage coverage.

You can explore top choices here: Best Hotel Credit Cards 2025

6) Over the phone, email, or text

Even if a caller sounds professional and claims to be from your bank or credit card company, you should never give out your card information unless you initiated the contact. Scammers often impersonate customer service representatives to trick people into sharing their details.

The same rule applies to payment links sent via email or text. Always double-check the source and, when in doubt, call the number on the back of your card.

7) When you can’t afford the purchase

Charging something you can’t afford to pay off in full usually results in expensive interest charges. A $500 purchase could take months to pay off if you only make the minimum payments. On top of that, credit cards can make it psychologically easier to overspend.

If you are planning a large purchase and have the funds to pay it off right away, using a travel card can be a smart way to earn perks like points, insurance, or lounge access.

If you’re booking a trip and want to get something back for it, try one of these high-value cards:

• Best Airline Credit Cards 2025
• Best Hotel Credit Cards 2025

8) At card readers that look suspicious

Some payment terminals at gas stations or ATMs may have been tampered with using skimming devices. These tools can capture your credit card information when you swipe. Warning signs include loose hardware, broken security seals, or devices that look out of place.

Instead of swiping, use tap-to-pay or a mobile wallet when possible. These methods are encrypted and don’t expose your full card number.

9) When someone approaches you on the street

It’s common to see people collecting donations for causes like animal rescue, environmental efforts, or disaster relief. While many fundraisers are legitimate, it’s important to be cautious when someone asks for your credit card information in person, especially if they plan to write it down manually.

Without a secure payment device, your card details could be mishandled, lost, or used for unauthorized charges. Even if the person seems trustworthy, you have no way to verify how your information will be processed or stored.

If you’d like to support the organization, visit their official website later and make your donation through a secure form.

10) When using public or shared Wi-Fi

Wi-Fi at cafes, airports, or hotels can be convenient, but it also leaves your online activity exposed. Hackers can intercept data sent over unsecured networks, including payment information.

If you need to shop or log into financial accounts while on public Wi-Fi, use a VPN to encrypt your connection. You should also avoid entering sensitive information unless you’re on a private network.

If you often find yourself working or shopping online while traveling, consider a card that offers perks like secure Wi-Fi access, travel protections, and airport lounge access: Best Credit Card for Airport Lounge Access 2025

And to secure your digital activity, here are our top recommendations for VPNs that offer fast, private, and easy-to-use protection:

11) If you suspect fraud on your card

If your credit card is missing or you notice suspicious charges, stop using it right away. Most banks now let you lock your card through their app while you investigate. This can prevent further misuse while you report the issue. Some credit cards offer stronger fraud monitoring and easier customer support, especially those designed for seniors or less tech-savvy users.

Consider one of these options: Best Credit Cards for Seniors and Retirees 2025

If your credit card is ever lost, stolen, or misused, you’re not just dealing with a single transaction. Criminals may try to open new accounts, apply for loans, or sell your personal details on the dark web. Identity Theft companies can monitor personal information like your Social Security Number (SSN), phone number, and email address and alert you if it is being sold on the dark web or being used to open an account. They can also assist you in freezing your bank and credit card accounts to prevent further unauthorized use by criminals.

When credit cards are worth using

Despite the risks outlined above, there are still plenty of situations where using a credit card can be the smarter choice. When used responsibly, the right card can protect your purchases, unlock valuable rewards, and simplify travel or large expenses. Credit cards are often the best option when:

• You’re booking flights, hotels, or rental cars, and want access to travel perks or protections
• You’re shopping online and want fraud protection and the ability to dispute a charge
• You’re trying to earn cash back, airline miles, or a welcome bonus you can actually pay off in full
• You want to extend your payment timeline without interest using a 0 percent intro APR offer

The key is to make sure the reward doesn’t come with a cost. If you’re using a credit card for points or convenience, but carrying a balance month to month, you’re likely paying more in interest than you’re getting in value.

What this means for you

Credit cards can be powerful tools for rewards, protection, and convenience, but only if you use them with intention. Avoid risky transactions, be aware of fees, and protect your information with secure networks and payment methods. At the same time, take advantage of cards’ strengths for safe, high-value purchases.

Related Links:

• How AI is now helping hackers fool your browser’s security tools
• Tech security check: Am I doing enough to keep my computer safe?
• Social Security Administration phishing scam targets retirees

Kurt’s key takeaways

Credit cards can be incredibly useful, offering perks like rewards, fraud protection, and travel benefits. But they’re not always the right tool for the job. Using your card in the wrong situation, like on an unsecured website, over public Wi-Fi, or with a shady merchant, can put your finances and personal data at serious risk. It’s also best to avoid using credit cards when you’re already carrying a balance, can’t afford the purchase, or face high processing fees that outweigh the rewards. The good news is that when you use credit cards wisely, they can work in your favor. Paired with tools like VPNs and identity theft protection, the right card can actually enhance your financial security and flexibility. The key is knowing when to swipe, when to pause, and how to protect yourself at every step.

Have you ever had a credit card mishap or near-miss? Let us know in the comments below.

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