Average consumer paying $925 this year because of 'hidden costs' included in bills
From overdraft fees to late fees and identity fraud, many consumers pay more than just their bills.
The bottom line on a bill doesn’t always tell the complete story. U.S. consumers are paying nearly $1,000 in “hidden costs” this year on top of their average bills.
These hidden expenses will cost the average household $925 in 2021, up sharply from $577 in 2020. The 2021 Hidden Costs of Bill Pay report, using doxoINSIGHTS data combined with other authoritative sources, provides a comprehensive look at America’s top concerns while managing and staying on top of bills.
The report breaks out the expenses by category:
Added cost of credit, $684. The interest rate impact of a 35-point improvement in credit score results in an annual savings of $684 for the average household when considering the three most common forms of consumer debt (mortgage, auto loan and credit cards).
Late fees, $119. Although the average cost of late fees across all households is $119 annually, among households that have one or more late fees, the cost is $313. Because late fees can directly affect a household’s credit score, they are even more costly than the numbers show
Overdraft fees, $97. Banks charge consumers more than $12 billion each year on overdraft fees. Thirty percent of households report having one or more annual events. Bill payments, which are predominantly drawn from checking accounts, are the main cause of bank overdrafts each month. Although the average cost of overdraft fees across all households is $97 annually, among households that have one or more overdraft fees, the cost is $322.
Identity fraud, $26. Although total identity fraud losses reach $17 billion in annual costs, much of this is absorbed by card issuers and merchants. Even so, the average household out-of-pocket costs for identity fraud still amounts to $3.3 billion, or $26 per household each year. These are just the direct costs, not including the time and expense consumers spend to restore and repair their identity records once compromised.
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