I'm looking for a word or phrase that expresses something (or a decision) being expensive by costing money in many small bits (perniciously) rather than being a large single cost.
@Dan Bron's suggestion of nickel-and-dime is a good one. Per the Oxford Dictionaries:
Harass (someone) by charging for many trivial items or services.
‘we don't nickel-and-dime our customers like some vendors that charge extra for every little utility’
It is perhaps a better answer than what I thought of: penny wise and pound foolish. The Oxford Dictionaries describe it thus:
Careful and economical in small matters while being wasteful or extravagant in large ones.
If you try to save money in the short run, you'll end up paying a lot more over time.