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Yes, there are several downsides to installing rain chains. For one, rain chains have a lower flow capacity than a typical gutter and downspout system. This means that if there is a rainstorm, the rain chain can stop working completely. Rain chains also cannot redirect rainwater away from your house. In homes with a sloped yard, this could cause water damage in your foundation or basement. 

Downspouts channel water from your roof and gutters into the ground following a specific route so water doesn’t accumulate around your house’s foundation. Without a downspout, the standing water will wash away material and disrupt the soil, leading to foundation erosion. The standing water will also form ice around your house during cold weather, causing a safety hazard.

Any small amount of standing water can be damaging to your gutters. It’s recommended that a ¼ inch puddle or more should be addressed. Failure to keep water from pooling in your gutters can result in clogs, algae growth, and pests that damage your gutters over time. 

Underground downspouts refer to the sections of downspout extensions that lead away from your home and gutter system. While they cost more than traditional extensions, they can provide several benefits, such as less frequent damage and no need to move them for lawn care tasks. Whether they're worth it or not depends on your budget at installation time and how much convenience they'll add to your situation.