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Americans Paying $577 a Year in "Hidden" Bill Costs

You likely don't know it, but you're paying way too much in hidden household bills

Are you paying too much in “hidden” household bills?

Trick question, right? After all, how would you know if you’re paying a utility or phone bill, for example, laden with fees and costs you didn’t recognize?

A new report from doxo, a Seattle, Wa,-based digital payment service, shines some much-needed light on the topic.

According to doxo, Americans may be paying an additional $577 in hidden bill pay costs each year, due to overdraft and late fees, cost of poor credit, and account fraud, among other issues. Totaled up, that figure represents over $74 billion in “extra” annual consumer household expenses.

This from the study:

Each year U.S. households spend over $3 trillion, about half of all household expenses, on recurring bill payments. Staying on top of these bills is the single largest determinant for consumer financial health. The hidden bill pay costs – obscured in identity theft, payment account fraud, late fees, overdraft fees, and detrimental credit impacts – amount to an additional $74 billion annually, averaging $577 per household.

Doxo breaks down the hidden cost numbers – in dollar amounts - as follows:

--- $27.00 in Payment Account Fraud and Identity Theft Costs: While total identity fraud losses reach $16.9B, much of this expense is absorbed by card issuers and merchants. Even so, the average household still incurs direct out of pocket losses of $27 each year to identity theft or payment account fraud, for a total of $3.5 billion – not accounting for the additional consumer time and expense required to repair identity. Over 150M consumers have had their payment or identity data compromised in recent hacks of U.S. businesses, and over 900 municipalities and billers were hacked in 2019 alone.

--- $117.00 in Overdraft Fees: The average bank overdraft fee is over $30 per incident, and bill payments are the primary cause of bank overdrafts. Each year banks charge consumers over $15 billion in overdraft fees or about $117 per household.

--- $132.00 in Late Fees: Missing or paying a bill late often incurs late fees, and 54% of households incur one or more late fees every year. This totals over $17 billion in household expense, or $132 per household.

--- $301.00 in Added Costs of Credit: Staying current on bills and debt payments is a primary factor for strengthening credit. The study data shows that staying ahead on payments and improving credit score by 35 points can save the average household $301 per year in interest expense. The average U.S. household carries over $72,000 in revolving debt – for mortgages, auto loans, and credit cards – so boosting credit and qualifying for lower interest rates significantly reduces expenses.


The doxo report also shows that Main Street Americans are “increasingly concerned” about getting stuck with expenses when managing and paying their bills.

· 95% of Americans are concerned about bill pay impacts on their credit score

· 91% worry about identity theft when managing online accounts

· 85% are concerned about having payment account information stolen

· 81% worry about incurring late fees and penalties

· 67% are anxious about overdrafts to their bank account when paying bills

The report is a good, thorough look at the extra money we pay on routine bills as consumers, without even realizing it. It’s hard work to go through household services contracts to root out fees and penalties we may not otherwise know about.

But it’s a job worth doing if you want to eliminate late fees, hidden penalties and other creatures of the night, bill payment-wise.