What can excessive reliance on credit cards potentially lead to?

Excessive reliance on credit cards can lead to increased debt and a lowered credit score due to the accumulation of high-interest balances that may become difficult to repay. When individuals frequently carry a balance on their credit cards and consistently make only minimum payments, it causes their debt to grow over time. High credit utilization and missed payments can negatively impact a person’s credit score, making it more challenging to secure loans or favorable interest rates in the future.

Moreover, when consumers depend heavily on credit cards, they may not develop strong budgeting skills, which can exacerbate financial problems. As a result, unrestrained credit card use can spiral into a cycle of debt that affects both financial stability and creditworthiness. Recognizing these risks is crucial for managing personal finances effectively and avoiding the pitfalls associated with overusing credit.