Most of us have missed a payment due date at some point in our lives, whether because we didn’t have the money to pay it or because we simply forgot to circle the date on our calendars. A new survey from Citi digs a little deeper to find out how many of us are paying bills late and why—as well as what the repercussions of those late payments are.
More than half of those surveyed (59%) said they had paid a bill late in their lifetime, with 88% of those late payments occurring within the past year. Why so many late payments? Reasons cited included the following:
- Forgetfulness – 61%
- Lack of funds – 42%
- Too busy – 39%
Late payments typically incur late fees, which can be as high as $35 each month. Credit cards in particular tend to levy steep late fees of anywhere from $15 to $35 per missed payment. Customers can often get late fees waived by calling their credit card issuer, utility company, or other creditor to explain their circumstances, but only 40% of respondents who had paid a bill late said they had asked for the fee to be waived.
Perhaps because of the late fees and other penalties that credit card issuers tend to charge for late payments, those bills aren’t the most likely to be forgotten. The most frequently tardy bill is a utility bill, with half of those surveyed saying they’d missed a utility bill payment in their life. Cell phone and telephone bills came in second; 44% reported posting those payments late at some point. Credit card bills and cable bills were the third most likely to be overlooked, with four in 10 respondents admitting they’d paid one of those late.
Cause and effect
How are those missed payments affecting people? Besides costing money in fees, late payments can cost time dealing with companies on the phone. Of the 40% of people overall who reported requesting a late fee to be waived, 57% of those called their credit card issuers to make their case for fee relief and spent a minimum of 10 minutes on the phone.
Of those who didn’t get fees waived, more than a third estimated they were charged as much as $25 a year, and one-fifth said they were charged between $26 and $50 yearly.
Citi Simplicity, the only credit card on the market that never charges a late fee or a penalty rate if customers miss a payment, sponsored this survey. It was conducted via telephone April 19-21, 2013. Random digit dialing was used to reach a representative sample of 1,006 adults over age 18.