Banks Working Harder to Collect Credit Card Debt

by MB on September 10, 2008

According to an article in today’s Wall Street Journal, big credit card companies are ramping up collection efforts on their credit card portfolios.

Citigroup has hired a number of new collectors and have increased the frequency of calls to delinquent account holders. American Express is offering to cut interest rates and fees, while Bank of America has begun contacting customers with late accounts earlier than in the past.

This effort is in response to an increase in delinquencies brought about by a number of factors including decreasing home prices, increased gasoline prices, and rising unemployment. The banks are also facing pressure from other areas of their business and are aggressively trying to keep credit card debt from being the next banking crisis.

Total revolving debt in the United States, which primarily consists of credit card balances, was $969.9 billion at the end of July.

The banks recommend that if you see yourself getting into trouble, it is best to go ahead and contact your credit card company in order to work out a plan as soon as possible.

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