What are Credit Card Debts and why are they dangerous?

Credit card debt is a form of revolving credit that becomes especially dangerous due to its high interest rates, typically ranging from 15% to 30%. What makes it particularly risky is how easily balances can grow when payments are not made in full. Most consumers make only the minimum monthly payments, which mostly go toward interest—not the principal—causing the debt to persist and compound over time. This creates a debt trap that’s hard to escape. As balances increase, so do minimum payments, and missed or late payments can severely damage credit scores, limiting access to affordable credit in the future. The combination of ease of use, high costs, and long-term financial consequences makes credit card debt one of the most dangerous forms of consumer borrowing.

Personal loans may seem straightforward, but they can be deceptively risky. Because they are unsecured, lenders charge higher interest rates, especially for borrowers with lower credit scores—sometimes reaching 30% or more. Borrowers are often tempted to use personal loans for discretionary spending or debt consolidation without changing their financial habits, which can lead to more debt over time. Fixed monthly payments can also become a burden if income drops or emergencies arise, and failure to repay can severely harm credit. The danger lies in their accessibility and the illusion of control, which can mask the long-term financial strain they create.