With inflation rising, here are the most common household bills Americans have

While Americans grapple with the supreme inflation In a generation, a look at consumer spending patterns shows where families are seeing the biggest price increases

According to bill-paying service doxo data first made available to CBS MoneyWatch, a typical household spends $2,000 each month paying bills. About a third of the typical household budget is spent on bills, the company found.

What varies dramatically is how bills are paid — certain types of expenses are often paid for with cash, while others are more often paid for with a credit card. Customers make strategic decisions about when and how to make payments, the study shows.

Who what how

According to Jim Kreyenhagen, doxo’s Head of Marketing and Consumer Services, consumers often think that their preferred way of paying their bills, whether it’s by bank transfer, credit card or check, is the default form of payment. But people pay their bills in different ways.

“The way consumers pay their rent or mortgage bill is very different from the way they pay their electric bills,” he said.

Consumers typically avoid paying bills with cash, except for rent – 20% of people pay their rent in cash, doxo found. Consumers are now twice as likely to pay for a credit card as they are for car insurance.

While mobile payment options are becoming increasingly popular when shopping, they are very rare when paying bills, with consumers reporting that they use mobile payment options for bills less than 2% of the time.

Late Payments

While the typical household in the doxo dataset pays 10 recurring bills, many people also delay at least one, doxo found. About 15% of bill payers delay a payment each month.

That number rose at the start of the coronavirus pandemic: about 4 in 10 households in 2020 reported delaying a bill payment. Of those who did, more than two-thirds said they deferred an electric bill.

Decisions about which payments to delay likely reflect consumer calculations of how long it takes utilities to respond to missed payments, Kreyenhagen said.

“When I make a decision about which bill I’m going to defer, we all know the utilities are pretty lenient,” he said. “If I skip a bill, my power doesn’t shut off immediately… But we also know that skipping a payment on your rent or mortgage is costly.”

There’s more inflation to come

Economists expect inflation to remain well above the US Federal Reserve’s target of 2% this year. However, higher prices would not be reflected on all bills, said Kreyenhagen.

For example, higher mortgage rates will not affect customers who are already paying mortgage and home insurance costs. Car insurance rates also jumped, will likely be reflected later this year and next when existing customers renew their policies. On the other hand, the ancillary costs, which have already risen for many, are likely to increase further, said Kreyenhagen.

“We think utilities are going to go up – we’re already seeing some signs of that,” he said. “That’s being driven by fuel prices.”

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