NEW YORK—When stimulus payments hit financial accounts earlier last month, many Americans spent at least a portion of that money to pay their bills.
There was a 30% month-over-month increase in the number of payments made to pay household bills from March 17 to March 21, according to research by doxo.
The company calculates that approximately 62% of stimulus payments are being spent on bills. A significant portion of that is being used to pay off credit card debt, CNBC stated in its analysis.
During the week of March 17, there was a 29% increase in credit card payments as compared to the same period in February. There was a 72% increase in the amount paid.
“We’re getting a strong signal that, generally, the majority of people are being responsible with these payments,” said Jim Kreyenhagen, VP of marketing and consumer services at doxo told CNBC. “It’s not surprising that Americans opted to use their stimulus checks to pay their bills. People have been putting debt on credit cards. We know that was building up.”
In October, for example, 42% of people skipped one or more bills due to the effects of the COVID-19 pandemic and 30% increased their credit card debt, doxo found.
Most likely, it’s not new spending that Americans are now paying down. These payments happened immediately, indicating people were paying down existing debt that had built up, CNBC noted.