Cash-poor Americans paid tens of billions in junk fees to borrow money last year

Cash-poor Americans paid more than $39 billion in junk fees last year just to borrow money, according to a new report.

SoLo, a community finance platform, released the findings Wednesday in its 2025 Cash Poor report. The report defined cash-poor as those living paycheck-to-paycheck, which some estimates believe is as many as 58% of Americans.

SoLo found that the $39 billion that cash-poor Americans paid was on top of the advertised Annual Percentage Rate (APR) rates for short-term loans.

Americans tended to turn to money lenders for unplanned expenses, which averaged $1,825 for the average family living paycheck-to-paycheck in 2024. But those families who borrowed money wouldn’t all be classified as low-income.

In fact, one in seven cash-poor Americans make more than $75,000 a year, the report found. A third of those who fall in the category make more than $50,000.

“Being cash poor is a way of life for most Americans,” said Rodney Williams, President and Co-Founder of SoLo. “This creates vulnerability in being able to manage variable and unplanned expenses.”

The report, which was created with the help of Opinium, Pace University, and The Aspen Institute’s Financial Security Program, found that nearly half of Americans living paycheck-to-paycheck have less than $200 in their checking and savings accounts combined.

Among the cash-poor, about two in three said their financial situation has gotten worse — not better — in the past 12 months.

Millennials and Gen X were most likely to be cash-poor, while Gen Z and Boomers were less likely. Across generations, women were slightly more likely than men to be cash-poor.

SoLo found that to avoid the hefty fees associated with loans, a growing number of Americans — 43% — are turning to friends and family to borrow money.

Still, cash-poor Americans reported cash advances as the largest source of borrowing for unplanned expenses. SoLo did see a reduction in Buy Now, Pay Later products, like Afterpay (SQ+3.04%), in 2024 from the previous year.

“As this report makes clear, too many Americans are one unexpected accident or disaster away from financial ruin,” said Alphonso David, President and CEO of the Global Black Economic Forum. “Living paycheck to paycheck should not be the new normal for a majority of people in the United States.”