A growing number of businesses have begun to raise their prices. At the same time, more and more people are eager to spend money on a wide range of products and services. As the world recovers from a pandemic, companies are seeking to restore their profits to the way they were prior to the outbreak. Meanwhile, consumers are spending larger amounts of money and facing increased debt in the process.
Increased Prices for Food, Hospitality, and More
Goods and services across a wide range of industries have seen rapid inflation as businesses attempt to thrive. For example, the fast-food chain Shake Shack plans to increase the price of its menu items by six to seven percent over the next several months. Hotels are also experiencing more demand than ever as people begin to book more vacations. As a result, hotel rates in 2022 are expected to increase 13 percent globally year over year and further in 2023.
A myriad of other products and services have seen a significant increase in pricing, ranging from car rentals and tires to doughnuts and beef. As these costs continue to increase, consumers are being forced to spend more than ever.
The Rising Debt Among Consumers
Although prices are gradually increasing, people are remarkably spending more than they have in the past. Consumers are also attempting to recover from the pandemic in various ways. This includes restoring their lifestyles to the way they were pre-pandemic. Subsequently, they’re eager to spend as much as—if not more—than they had previously to continue enjoying the products and services they love.
Because of this increased spending, many consumers are also more in debt than they were prior to the pandemic. In 2019 prior to the pandemic, approximately 9 million new credit cards were issued worldwide. Collectively, they resulted in a credit limit of $34.6 billion. Today, Americans roughly owe a total of $807 billion across nearly 506 million credit cards. Each average American family accounts for about $6,270 of that debt.
Of course, people owe increased debt in a wide variety of areas beyond basic goods and services, including student loans, mortgages, and medical bills. Approximately 41% of American adults need to pay off medical debt or experience issues with medical bills. At the same time, mortgage debts are increasing, with the total US mortgage debt reaching almost $10.76 trillion at the beginning of 2021. Also, around 44.7 million Americans owe student loan debt, reaching a total of more than $1.86 trillion.
Because of the varying types of debt that the average American has and the many companies attempting to collect, it’s becoming increasingly difficult to recover this debt.
The Future of Collections Amid Inflation and Increased Debt
Prices and debt continue to rise. Unfortunately, many people are simply unable to pay their debt, making debt collection more complex and challenging. According to FICO, one key criteria for company success is to identify and target the accounts that are capable of making payments. However, this can be difficult without the right technology and intelligence. It’s also important for companies to create the best customer experience possible to increase the likelihood that customers will pay.
Through Total CollectR, you can connect with customers as opposed to merely attempting to collect from them. This tool enables businesses to communicate with customers on the platforms that customers prefer, which helps optimize their experience. Throughout their journey, customers will benefit from a solution that meets their needs while helping to meet yours. They can access the platform on desktop or mobile devices and make secure payments. It also provides the ability to set up unique payment plans for each customer.
With the help of Total CollectR, you’ll be able to successfully collect debt from customers while maintaining and growing your relationship with them. Contact us today to learn how Total CollectR can enhance your debt recovery efforts.