The average amount of credit card debt held by individuals has increased by more than 9% during the past two years, according to a study of the market released yesterday by the Consumer Financial Protection Bureau.
The average credit card had a balance of $4,800 at the end of 2016, which represents the highest amount since the CFPB started tracking the data more than 12 years ago.
The report is a regular one issued every two years by the CFPB. During the past two years, more issuers have shifted to longer-term loss mitigation plans for consumers who are having problems repaying their debts from shorter-term programs that were more popular.
Issuers are also decreasing the size of their third-party collection agency networks that are used to collect on unpaid accounts, according to the CFPB.
More issuers are planning to sell their debts and those that are already selling their debts plans to sell more, according to what issuers told the CFPB.
Right-party contact rates for in-house collection efforts of card issuers ranged between 3% and 7%, while rates for third-party collection agencies ranged between 0.5% and 2%.
The CFPB noted that while many issuers had a cap on the number of calls that could be placed daily to an individual with an unpaid debt, only one issuer had a cap on the number of weekly calls that could be made. “Without a weekly cap,” the CFPB wrote, “a consumer could potentially be called anywhere from 21 to 105 times per account in a given week.”
