Free Report: Credit Card Receivables in 2008: Evolving to a Holistic Recovery Strategy

Download this Free Report and Learn:

• Why some credit card issuers are changing their expectations about credit card receivables debt collection operations and their contribution to reported earnings
• Why increased chargeoffs, lower debt collection in contingency networks, and lower proceeds from debt buying are challenging recovery executives
• What tools credit card receivables firms are utilizing to fix recovery issues

How credit card receivables firms can improve recovery rates

Credit Card Receivables in 2008

All of the largest credit card companies have access to the same tools within their toolboxes to manage receivables: pre-chargeoff call centers, contingency agencies, legal networks, debt buyers, bankruptcy servicers, etc. However, we have seen that credit card companies are choosing between these tools in much different ways in attempts to fix their recovery issues.

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How Bringing Cash Forward Affects Credit Card Receivables

Some credit card companies have increased their sale of debt portfolios over the past six months to increase the pace at which receivables are converted into cash. This strategy is typically utilized only for the sale of certain buckets of debt. The decision to sell necessitates discontinued placements to a contingency network, so a card issuer must trade the longer-term cash flows of agency recoveries for the short-term proceeds of a sale.

Download Credit Card Receivables in 2008: Evolving to a Holistic Recovery Strategy and learn how a successful debt seller promotes a portfolio to the right debt buyers in the market.

With the rise of debt buying, many debt sellers have been challenged to generate expected returns on debt sales - in some cases, experiencing year over year price decreases of as much as 40 percent.

Why are Credit Card Companies Waiting For Cash?

Download Credit Card Receivables in 2008: Evolving to a Holistic Recovery Strategy and discover:

• Why some creditors are reducing debt sales or suspending them altogether
• Credit card companies are expanding their contingency networks and increasing placements to current agencies
• What impact this action and the economy has on debt collection rates

What's the right approach for Credit Card Receivables?

Download Credit Card Receivables in 2008: Evolving to a Holistic Recovery Strategy and discover:

• How the country's largest credit card companies have chosen between the two strategies
• What impact have decreasing debt sales prices and poorer credit card receivables recovery rates had on creditors
• What's the best strategy for these creditors - bring cash forward or wait for cash

Internal analytics

Some credit card issuers have developed detailed and multifaceted financial models to evaluate credit card receivables firms by the net present value of cash flows associated with those options. In this way, a credit card issuer's decision to bring cash forward in a debt sale can be modeled against the cash flows likely to be generated by its contingency network.

Download Credit Card Receivables in 2008: Evolving to a Holistic Recovery Strategy and learn:

• Why internal analysis is critical for credit card companies
• What are the unpredictable factors that may affect internal analysis - prolonged recession, unemployment rates, etc
• What impact certain debt sales have on a credit card issuer's ability to monitor liquidation

External Knowledge of Credit Card Receivables Firms

Credit card issuers with even the best internal analytics may lack the information to create an optimal debt collection strategy. Debt collection agencies vary in terms of competencies, performance, and business practices. Have you chosen the right partners?

Download Credit Card Receivables in 2008: Evolving to a Holistic Recovery Strategy and discover what credit card issuers are doing to engage the right debt collection service providers.