Small and midsize companies may want to invest in credit collections software given the current economic climate, as InsideARM reported that the Federal Reserve announced that the United States' consumer credit outstanding reached an all-time high in October. While this was primarily on the backs of credit cards, auto loans and students who owe money for school, businesses cannot be too careful about protecting their revenue streams during tough times.
"Total consumer credit outstanding hit $2.753 trillion and rose at an annualized rate of 6.2 percent in October, the highest reading ever on the Fed’s monthly Consumer Credit report," the news source said. "All categories of consumer debt were up, with non-revolving debt (like that seen in auto and student loans) leading the way with a 6.9 percent annualized increase. Non-revolving debt outstanding was $1.895 trillion in October."
Americans also cut back on consumer spending in October, according to InsideARM, with disruptions from Superstorm Sandy also making an impact. Adding to this, the month was the only time in the past five months when credit card debt increased as well. Revolving debt grew to $3.4 billion for October, representing an annual rate of 4.7 percent. The Federal Reserve's report noted that the total consumer credit card debt outstanding for the month was $857.6 billion, the second highest since the debt start to rebound about two years ago.
Collections software can help companies organize their payment collections process to make calls and letters to customers who owe money a bit easier track, but The Globe and Mail provided some advice for how to make this type of outreach as effective as possible. The website said organizations need to be proactive with their calls, always be prepared with as much information as possible and never jump to conclusions about an unpaid debt.