The Cost of Borrowing
Our recent work for SoLo sheds light on the financial challenges faced by many Americans living paycheck to paycheck. According to our “2025 Cash Poor Report,” unplanned expenses cost the average American family $1,825 annually, a slight decrease from $1,900 in 2023. These unforeseen costs include auto repairs (29%), utility bills (19%), and medical expenses (17%).
The report highlights the significant burden of “junk fees” associated with borrowing money to cover these unexpected expenses. For cash-poor Americans, reliance on savings or credit cards alone is often insufficient, with only about 25% able to manage such costs without additional borrowing. This leaves the majority turning to other financial solutions, which frequently come with high fees or interest rates, compounding their financial strain.
We found that fees could spiral on buy-now-pay-later purchases, perpetuating a cycle of debt.
Check out more insights in the full report here:
