Nearly 40% of Americans paid a late fee in past 12 months: Survey
- Late fees on credit cards were the most common
- Collectively, Americans have racked up $1.12 trillion in credit card debt
- 1 in 4 Americans used buy now, pay later services in the past 12 months
In this March 5, 2012, file photo, consumer credit cards are posed in North Andover, Mass. (AP Photo/Elise Amendola, File)
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(NewsNation) — Consumers are struggling to pay their bills on time and many are leaning on credit to make ends meet.
A new NerdWallet survey found 37% of Americans have been charged a late fee on their bills over the past 12 months. Among those with minor children, that number jumps to 61%.
Late fees on credit cards were the most common, with 21% of respondents incurring at least one penalty over the past year, followed by utility bills (10%) and rent (8%).
The survey’s findings underscore what other recent reports have shown: more people are falling behind on their credit card debt.
During the first quarter, the share of credit card debt that was more than 90 days overdue rose to 10.7%, a 14-year high, according to the Federal Reserve Bank of New York. Collectively, Americans have racked up $1.12 trillion in credit card debt.
Nowadays, many consumers are relying on credit to cover basic necessities at the supermarket, where prices are up 25% since the pandemic.
Of those surveyed by NerdWallet, 16% said they’ve used a credit card to pay for necessities over the past twelve months because they didn’t have enough money to pay.
The survey found more than one-quarter (27%) of Americans generally carry a balance on at least one credit card from month to month. That’s happening even as the average interest rate on a given credit card surges to roughly 21.5%, the highest level since 1994.
Buy now, pay later services have also become a popular credit option, with 25% of Americans using them in the past year.
“Because buy now, pay later services don’t require a credit check, the barrier to entry is low,” NerdWallet credit cards expert Sara Rathner said in the report. “This convenience can work against you, however, if you’re taking on more debt than you can realistically pay off.”
Younger Americans were especially likely to utilize buy now, pay later, with 40% of Gen Z respondents (ages 18-27) and 36% of millennials (ages 28-43) using those services in the past year. Over 10% of those surveyed in each of those groups said they used buy now, pay later to cover necessities.
Despite the signs of financial hardship, 30% of Americans are feeling better about their ability to qualify for credit now compared to a year ago, NerdWallet found. That’s compared with 19% who feel worse today.
The NerdWallet survey of 2,061 U.S. adults was conducted from April 2-4, 2024.
