“Cotton buds are commonly used to clean the ears, remove wax, in case
of itching in the ear, aural toilet in discharging ears and some time
as a habit.” – explain Suresh Kumar and  Shamim Ahmed  of the Department
of ENT, at Liaquat University of Health Sciences, Jamshoro, Pakistan.
They go on to warn that :

They supposedly represent a safe means of cleaning the
ear and nose. Insertion of cotton tips is not only unnecessary but also
potentially dangerous.

The conclusion of their study, which tracked cotton bud usage in 100
patients at the ENT Department, of Sir Syed Medical College&
Hospital Karachi, (July 2005 to January 2007) is that

Use of cotton buds tip and match sick [sic] can
lead to lot of complications including trauma to external auditory canal
and tympanic membrane which can lead to perforation resulting in
deafness. It should be avoided for the purpose of cleaning ears.

See USE OF COTTON BUDS AND ITS COMPLICATIONS, Journal of Surgery Pakistan (International), 13, (3), July – September 2008.

The findings echo a broadly similar conclusion which was reached by
Jonathan C Hobson, MA MRCS and Jeremy A Lavy, FRCS, who co-authored  ‘Use and abuse of cotton buds’ for the Journal of the Royal Society of Medicine, August 2005 vol. 98 no. 8,pp. 360-361. Their inquiries into ear-cleanings by 171 cotton bud users revealed that
“…most cotton bud users, when asked why they did it, merely said ‘it
seems like a good idea’ or family and friends use them.” Though the
authors do add: “We have to admit that a large number of people use
cotton buds without coming to harm and the actual risk remains to be
elucidated.”