What Do Consumers Really Pay on Their Checking and Credit Card Accounts? Explicit, Implicit, and Avoidable Costs.

The article discusses What amount people pay to use their bank and credit card accounts and which cost components are the largest. The costs that people could avoid paying if they made different daily choices are explored. The stability of the level and share of costs that are avoidable for a person over time is considered. Administrative data that contained every checking and credit card account transaction made by 917 consumers over two years were used. It was found that a median household pays $500 per year to use their checking and credit card accounts. Users could avoid half of this amount with behavior changes.