US households see annual increase in ‘hidden’ costs related to bill paying
On a per-household basis, costs equated to $986 on average annually
U.S. households have seen an increase year-over-year in total "hidden" or "often-overlooked" bill pay costs, according to a report from the online bill pay service Doxo.
The company said Friday that its "The Hidden Costs of Bill Pay 2022" report found U.S. households spent a total of $128 billion on detrimental credit impacts, overdraft fees, late fees and identity fraud costs per year. That marks a $9 billion increase from 2021, when the market impact was $119 billion, according to Doxo.
Serious young woman in glasses sit in living room pay bills taxes on laptop online, focused millennial female manage family expenditures expenses, plan budget on computer, make payment on web (iStock / iStock)
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"Moderate increases across the board contributed to this spike, with the biggest increase coming from biller late fees and penalties," the Doxo report said.
Credit costs, at $85 billion, made up the largest proportion of the $128 billion total for the four "hidden" bill pay cost categories, according to the report. Late and overdraft fees amounted to $20 billion and $16 billion respectively, compared to $15 billion and $12 billion last year, while identity fraud costs were $7 billion total for U.S. households, Doxo said.
On a per-household basis, the total of these costs equated to $986 on average, including $54 for identity fraud costs, $119 for overdraft fees, $155 for late fees and $658 for credit costs, according to the report.
File photo - Young woman with braided hair sitting on the sofa, looking on her smartphone.
Doxo also found that 86% of households indicated they had concern to some extent about potential bill pay impacts on their credit scores.
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Similar percentages of bill-paying consumers had other bill-pay concerns, with 85% saying they worried about stolen payment information and 84% pointing to identity fraud, according to the report.
File photo - Woman paying past due bills at home with laptop and calculator (iStock)
Nearly three-quarters of bill-payers (71%) expressed concern about late fees, while 59% said they were worried about overdraft fees, Doxo found. The respective percentages of households surveyed who reported incurring late fees or overdraft fees in the past year were close, with 32% saying they’d had at least one instance of the former and 30% saying they’d had at least one of the latter.
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The typical U.S. household spends just over $24,000 per year on 10 bill categories, according to a separate Doxo report released in October.