Debit Is Consumers’ Preferred Bill Pay Method, Despite Inflation Woes, a Study Finds

Debit cards are consumers’ favored method for paying bills, according to a report from bill-payment network doxo Inc.

Some 62% of doxo users pay their bills using debit cards, compared to 24% who use the automated clearing house and 15% who opt for credit cards, according to doxo’s “The Bill Pay Economy: How Americans Pay Their Bills” report.

The findings in the report dovetail with a recent study from the Pulse network that says active debit card holders now use their cards 34.6 times per month on average, up more than 4% year over year.

While consumers prefer debit cards to pay their bills, the bills they pay using the cards varies considerably. For example, 22% of respondents use a debit card to make electric-bill payments, while 10% use a debit card to make mortgage payments.

In comparison, cash is rarely used to pay household bills beyond rent, with 13% of consumers using cash to pay rent and about 2% using cash to pay utility bills such as water, waste, gas, and electric.

The reasons consumers use debit or credit cards to pay their bills include convenience and speed, rewards and incentives from credit card companies, security and fraud protection, and automation, Liz Powell, doxo’s senior director of insights, says by email.

When it comes to paying their credit card and mortgage bills, the ACH is consumers’ preferred method. More than 70% pay their monthly credit card bill or mortgage payment via the ACH. Renters are less likely to pay their rent using the ACH, with 34% doing so.

Overall, the average household pays 10 bills per month, resulting in an annual spend of $25,513 per year, or 34% of their income, up from $24,557 in 2023 and $24,032 in 2022, according to doxo.

With bill payment eating up more of consumers’ income, 74% of respondents say they have made changes to their spending and savings habits the past year in response to inflation.

One way consumers are adjusting their spending on bills is through the use of credit cards. “[When] there is the question of whether someone has the funds to cover that bill at that time, credit cards are also used to pay bills if the household needs to defer payment to a later date,” Powell says.

In addition to deferring the cost of a bill by paying it with a credit card, 17% of households will delay paying at least one bill per month, according to the report.

Biller Web sites are the most popular channel for bill payment, with more than 50% of respondents paying their bills through that channel. The remaining consumers pay their bills using other channels such as bank bill-payment apps, pay by phone, paying by mail, and in-person.

“In today’s digital age, consumers have a sense of familiarity and comfort when it comes to using online platforms—including Web sites and mobile apps—to tackle everyday tasks like paying bills,” Powell says. “In fact, over 60% of bills paid across the doxo network originate from mobile devices.”