Consumers in the United States make billions of transactions each year using cash, checks, debit cards and credit cards. How much does this cost them?

The median U.S. household pays $43 a month in banking and credit card fees and interest, while about 25% of households pay more than $100 a month and 10% pay more than $250 a month. According to a study by Assistant Professor Victor Stango and his co-author, Professor Jonathan Zinman of the Department of Economics at Dartmouth College, the typical customer could avoid more than half of those monthly costs by using different cards, by using available checking account balances to pay down credit card balances or by shifting high-rate debt to lower-rate cards.

Stango and Zinman’s study, “What Do Consumers Really Pay on Their Checking and Credit Card Accounts? Explicit, Implicit, and Avoidable Costs,” was published in the May American Economic Review: Papers & Proceedings. Stango and Zinman collected data on the daily online banking and credit card transaction for more than 900 American households.

They found that 85% of the households pay explicit credit card charges—the largest cost being credit card interest—while 32 percent pay overdraft fees on their checking accounts. They also found that median household could avoid 60 percent of all credit card interest charges, overdraft fees, and over-limit penalties and late fees with minor changes in behavior: reallocating from high- to low-rate cards, repaying debt using available checking balances, or using a much cheaper credit card with available credit.

In January Stango presented his work to an audience of academicians and practitioners at the American Economic Association meeting in San Francisco.