Three out of four (78%) people in Latvia conscientiously pay all their bills before the deadline set by the service provider, and the majority (90%) are currently not in arrears for any of the services they receive. Of those respondents who have incurred debt (10%), almost half (47%) have at least once taken out a loan to cover the debt, according to a survey conducted by the Credit Information Bureau.
While the majority of people pay before the due date, one in ten (10%) say they pay on the last date set by the service provider, while 4% pay after the due date, and 8% find it difficult to answer this question. The most frequent early billers are those with a personal income between 751 euros and 1 000 euros (83%), respondents in the 40-49 age group (82%), skilled professionals and office workers (81%).
Delays are not always due to lack of money
People with a poor family financial situation (12%), respondents with lower education (11%) and respondents with an income below 400 euros per household member are more likely to pay their bills after the due date.
Almost half (47%) are late because they receive their salary after the due date, a third (32%) are habitual, while only one in five (21%) admits that they do not have enough money to pay their bills.
“The data show that a relatively large majority have no objective reason for late payment, and this is more to do with the habit of putting off paying bills until later and then forgetting about it. Unfortunately, this forgetfulness can backfire if the need for other services arises and the information on late payments has already been placed on credit registers and affected the customer’s credit rating. For this reason, it is advisable to choose one of the following payment options: pay the invoice immediately upon receipt, set aside a time in the calendar each month when all invoices for the month are paid at the same time, or make automatic payments,” recommends Intars Miķelsons, Commercial Director of “Kredītinformācijas Birojs”.
One in two (47%) of those surveyed with late payments admit to having taken on credit commitments at least once to pay their utility bills. According to Miķelsons, this is a very dangerous and unwelcome behaviour: “The debt burden can snowball until it really can’t be helped and then it’s downhill. In this case, it is much wiser to review the services received or the amount of them and assess whether all of it is really necessary.”
People want longer payment terms
More than half (55%) of late payers said an extended payment period would help them pay their bills on time, while just over a quarter (27%) wanted more regular reminders when bills are coming due. 13% of respondents said that the unavailability of other company services until the debt is paid would encourage more timely payment, while one in ten (11%) would be motivated by a warning that the data would be entered into the Credit Information Bureau’s database and 8% by higher interest penalties for late payment.
“Longer payment terms or more regular reminders of the approaching payment deadline are possible methods that businesses can consider reducing the number of late payers. At the same time, credit information registers are also an important tool for entrepreneurs, where they can submit information on their debtors, as well as check a potential client’s credit rating and assess risks before signing a contract,” recalls Miķelsons.
* The 2024 survey was carried out by Norstat, which surveyed 1 000 Latvian residents aged 18 to 60.