The report from the Financial Health Network, a Chicago-based nonprofit focused on consumer financial health, offers some insight into how much consumers rely on buy now, pay later services. The report said a third of users had turned to BNPL two or more times in the month before participating in the survey, signaling that consumers are “loan stacking.” 

Rising fees and interest appear to have taken a more significant toll on consumers of color. The report found that Black and Latinx households spent 7% and 5% of their incomes, respectively, on interest and fees. By contrast, White households only spent 3% of their incomes on fee and interest payments.

The Consumer Financial Protection Bureau has proposed capping credit card late fees at $8 per payment and prevent those fees from being more than 25% of the minimum payment. More broadly, the Biden administration has taken aim at “junk fees,” calling for more transparency around added fees and service charges.

The FHN report shines a light “on the true cost of financial services for average Americans,” Meghan Greene, senior director of policy and research at the Financial Health Network, said in a statement. “While it is reassuring to see the rate of the unbanked declining, it is concerning that certain segments of the population continue to disproportionately bear the costs of participation in America’s financial system.”

Last year, interest and fees on credit card balances carried month-to-month rose more than 20% to $113.1 billion, the report estimated. Almost half (46%) of financially vulnerable cardholders have more than $5,000 in credit card debt, according to the report.

Other research suggests that consumers are spending more with their credit cards, putting some deeper into debt. Worldwide credit card spending exceeded $13 trillion across in-store and e-commerce transactions, according to an annual report from Fidelity National Information Services, also known as FIS. Consumer credit card debt totaled $986 billion in the first quarter, according to a May report from the Federal Reserve Bank of New York’s Center for Microeconomic Data.

The rise in credit card debt follows an increase in consumer demand. The rate at which consumers said last October they had applied for a credit card in the last 12 months jumped 27.1%, up from 26.5% a year prior, the New York Federal Reserve Bank said last November. Meanwhile, the rejection rate for credit card applications declined to 18.5%.