Understanding the Consumer Spending Split and How to Recover More Across the Divide

It’s becoming a familiar headline: US household debt keeps climbing and delinquency rates keep rising. According to the Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit, household debt rose to $17.69 trillion in the first quarter of 2024. The report showed 6.9% of credit card debt transitioned to serious delinquency in the first quarter, with approximately 4.8% of consumers holding some debt in third-party collections.

Overall, 77% of American households have at least some type of debt, but that debt isn’t evenly distributed—and consumer spending habits can vary just as much depending on income level.

Understanding the split in consumer spending and its impact on household debt—and in turn, collections—is critical for today’s debt recovery strategies. While across the board debt may be climbing and delinquencies rising, your consumer engagement approach and communications to secure repayment cannot be one-size-fits-all for all consumers.