Image source: Getty Images.
Credit cards are one of the most common ways we pay for stuff these days. Tap, swipe, done — it almost feels the same as using a debit card.
But under the hood, credit cards come with way more risk and extra fees if you’re not careful.
The interest rates are no joke. If you don’t pay off your balance in full, those charges start racking up, and they compound every single day you carry them. And once you fall behind, it’s surprisingly easy to stay stuck there.
Truth is, you can put almost anything on a credit card. But that doesn’t mean you should. Here are five everyday expenses you shouldn’t pay with a credit card.
1. Pulling cash from the ATM
A “cash advance” sounds innocent enough. But it’s actually one of the worst moves you can make with a credit card.
When you use your card to grab cash from an ATM, the interest kicks in immediately. There’s no grace period. And the APR on cash advances is higher than the regular APR for purchases — sometimes 30% or more! Even worse, most cards tack on an upfront fee of 3% to 5% of the withdrawal amount, plus ATM charges.
All said and done, that $300 you withdraw might cost you $25 just to borrow for a few days.
Even in a pinch, there are better ways to access short-term cash. A personal loan or even using a bank with no overdraft fees can work out better.
2. Gambling and lottery tickets
Hey, I’m all for the odd scratcher or lottery ticket just for fun. But there’s a difference between throwing $5 cash at a dream and swiping your credit card mindlessly out of habit.
In some states, it’s legal to buy lottery tickets or fund online betting accounts with a credit card. But many issuers treat these transactions just like cash advances, which we just covered.
And even if your card doesn’t code it that way, using borrowed money to gamble is a slippery slope. The odds are already against you when gambling. So adding debt to the mix just stacks things even further in the house’s favor.
3. Bills that charge a 2%+ surcharge
You’ve probably noticed more businesses adding credit card processing fees at checkout.
A 2.5% surcharge on a $1,000 payment is nearly $25 down the drain. Some people justify the surcharge by saying, “At least I’m earning rewards!” But unless you’re using a card that earns more than the surcharge percentage (most people aren’t), the math usually doesn’t work in your favor.
Instead, just pay with your debit card or cash. Or if you must use a credit card, make sure your card is pulling its weight with rewards. Some cards offer unlimited 2% cash back with no hoops or bonus categories — check out the top ones here.
4. Monthly rent or mortgage payments
If you can pay your rent or mortgage with a credit card and skip the fees, it might feel like a sneaky way to rack up rewards.
But there are two big catches. First, many payment processors charge a convenience fee of 2% to 3% — which, as we just covered, can wipe out any rewards benefit. Second, if you’re putting rent on a card because you can’t afford it otherwise, that’s a red flag.
Using debt to cover housing costs isn’t a long-term solution. Instead of relying on plastic, look into budgeting apps or automated savings to help stay ahead of housing costs.
5. Any purchases you can get cheaper with cash
Some expenses are practically begging for a discount — if you have the guts to just ask.
Medical bills, contractor quotes, dental work, even some small retail stores will shave off a few percentage points if you offer to pay in cash.
If you swipe your credit card, you’re missing out on a better deal and potentially paying interest later if you don’t pay off the balance. That’s a lose-lose.
So next time you’re talking with someone at a checkout, try asking: “I’m just curious, do you offer any discounts if I pay today with cash?” You might be surprised how often that question works.
The bottom line
If you’re using the right card, credit can be a powerful tool for cash back, travel perks, and everyday convenience. But it’s not the perfect payment method for every type of purchase. Especially not when you’re paying fees and interest just to keep up.
Check out all our top rewards cards across every category.
Alert: highest cash back card we’ve seen now has 0% intro APR well into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.
