May 9

Press Release: 2022 FinHealth Spend Report Marks First-Ever Decline in Ten Year History of Tracking Fees and Interest Paid for Everyday Financial Services

Reduction attributed to student loan debt moratorium, pandemic-related decline in credit card debt and government stimulus funds allowing many to avoid high-cost lending; but underserved populations still pay greater proportion of fees and number of factors indicate likely rise in year ahead.

The Financial Health Network, the nation’s authority on financial health, in partnership with Prudential Financial, today released The FinHealth Spend Report 2022, examining how households in America managed their finances and accessed credit during the second year of the pandemic. Analysis of year-over-year trends for more than two dozen financial products and services found a rare decline in overall spending, though an outsized cost burden remains for underserved populations causing concern with an anticipated increase for the year ahead.

Top line data shows that total interest and fees declined to $305 billion for 2021, down from a high of $319 billion in 2020, a 4% drop driven largely by changes in spending on credit cards and student loans. However, access to financial services remains costly for populations that have traditionally been underserved, with massive disparities in spending by race and ethnicity, income, and financial health tier. This year’s report found that households considered not financially healthy accounted for 83% of all fees and interest paid.

As a percentage of their income, Black households on average spent more than twice what White households spent on interest and fees (7% vs. 3%), while Latinx households spent 40% more than White households (5% vs. 3%). And, households with low-to-moderate incomes spent nearly three times as much of their income on interest and fees than households with higher incomes (8% vs. 3%).

“The last two years of the pandemic have been a roller coaster for people financially, often forcing them to both recalibrate their lives and their finances with every new COVID development,” said Financial Health Network president and CEO Jennifer Tescher. “While we’ve witnessed a rare drop in overall spending on financial services in 2021, the confluence of increased consumer spending, the end of government aid, and rising inflation all portend an increase in fees and interest for 2022 that will likely fall disproportionately on households that are already struggling financially.”

The 2022 FinHealth Spend Report tells a story of high-level economic trends while also providing unique insights into the particular issues shaping individual product markets. A snapshot of the product data includes:


  • Overdraft and nonsufficient funds (NSF) fees appear to have plateaued, totaling roughly $11 billion both in 2020 and 2021. Recent announcements of overdraft reform by several major banks could create positive shifts in this market in 2022.
  • Black households with bank accounts were almost twice as likely as White households to report having paid at least one overdraft fee, while Latinx households were almost one and a half times more likely. Financially Vulnerable households with bank accounts were nearly ten times as likely to overdraft as Financially Healthy households.

Student Loans:

  • Interest and fees on federal student loan totals fell precipitously from an estimated $25 billion in 2019 to $6.3 billion in 2021 due to the moratorium, which went into effect in March 2020 and, as of this report’s publication in April 2022, is set to expire August 31, 2022.
  • For every month that the moratorium is extended, this report estimates that federal student loan borrowers avoid $1.5 billion in interest payments. And, while federal student loans comprise 92% of the $1.7 trillion loan portfolio, private student loan borrowers paid 30% more interest and fees in 2021 compared to federal student loan borrowers.

Credit Cards:

  • While interest and fees on revolving balances for both general purpose and private label cards declined overall in 2021, balances demonstrated a record jump in the final quarter of 2021 and are a red flag for financial health as they approach pre-pandemic levels.
  • For the entire year, interest and fees on revolving balances for general-purpose credit cards dropped an estimated 10% to $95 billion, while the corresponding totals for private label credit cards dropped an estimated 13% to $11.4 billion.

Buy Now, Pay Later (BNPL):

  • In March, a supplemental BNPL brief was released providing an in-depth look into these new tech-driven payment platforms showing that roughly one in four users of BNPL are financially vulnerable, meaning that they are struggling with most or all aspects of their financial lives, and of these users nearly a quarter report struggling to make payments.

Pawn, Payday, and Title Loans:

  • Interest and fees for alternative financial services have dropped dramatically between 2019 and 2021, with pawn revenue falling 25%, payday 45% and title loans nearly 40% within that period.
  • Payday loans in particular saw significant declines over the past year, with the percentage of households reporting usage dropping from 5% in 2020 to 3% in 2021. Black households, households with low to moderate incomes, and Financially Vulnerable households all reported meaningful drops in usage of payday loans.

“One of the reasons we collaborate with the Financial Health Network is to further evaluate how households managed their finances through the pandemic,” said Sarah Keh, vice president, Inclusive Solutions at Prudential.  “Access to high-quality, affordable financial services – especially across race, ethnicity, and income – provides  data for researchers, policymakers and advocates to track trends and identify opportunities to support more equitable financial health policies and products.”

This report marks the 10th in the series overall, and the second under a new methodology, which pairs extensive secondary research with a nationally representative survey on consumer spending. New to this year’s report is year-over-year trend data on consumer spending on a wide variety of common financial services, including bank account fees and most non-mortgage credit products. This year’s report adds analyses on federal student loans, buy here, pay here (BHPH) auto loans, buy now, pay later (BNPL) services and earned wage access (EWA) products. In 2022, the Financial Health Network is beginning to produce in-depth briefs that take closer looks at products with particular implications for policymakers, financial service providers, and financial health in general.

For more information regarding the FinHealth Spend Report, please view the 2022 Report.

Source: Financial Health Network (link opens in a new window)

financial health, financial inclusion