What is a potential downside of using credit cards?

The potential downside of using credit cards primarily revolves around high-interest rates and the risk of accumulating debt. When individuals use credit cards, they often spend beyond their means, leading to outstanding balances that can accrue significant interest charges if not paid off in full by the due date. This means that borrowing on credit can become costly over time, especially if minimum payments are made, which mostly go toward interest rather than reducing the principal balance.

Moreover, the ease of swiping a credit card frequently tempts users to make purchases they might not otherwise afford, contributing to a cycle of debt that can be difficult to escape. Therefore, recognizing the pitfalls associated with credit cards, such as the potential for high-interest rates and the risk of accumulating debt, is essential for responsible financial management.