Nearly One in Three Consumers Use Financing to Cover Energy Bills

Nearly one in three (32%) of US consumers are resorting to using financing options, such as credit cards, loans or payment plans, to cope with increased energy bills.

Despite small declines in average energy costs over the past two months, the latest Consumer Price Index report revealed that costs have risen 4.7% across the US since May 2023.

Following the rise in costs, CNET Money’s report found that 78% of US adults are concerned about their home energy bills this summer. In particular, 35% of adults in the Northeast are more concerned about their energy costs this summer compared to last summer.

Therefore, 21% of consumers are relying on borrowing, while 19% are using payment plans or payment assistance programs to tackle higher energy expenses.

To further manage costs, 24% of consumers are cutting back on essential purchases to find room in their budgets for energy bills, 13% are increasing their income and 15% are dipping into savings.

The report said: “Using credit cards may seem like the next best solution if you can’t afford to pay your energy bill. But paying for your energy bills with a credit card can be costly in different ways.

“Not only can this lead to interest and debt if you can’t pay the balance back in full, but some energy companies charge a processing fee when you use a credit card to pay your bill.”

The report also revealed the top 10 states with the highest electricity bills are Connecticut, Hawaii, Massachusetts, Rhode Island, Maryland, Tennessee, West Virginia, Alabama, Alaska and Maine.

In these states, the average monthly electric bills range from $160 to $202, which is significantly higher than the national average of $135.