A credit card debt collection agency is a business that collects an individual’s debt on behalf of credit card companies. A collection agency is not a division within the credit card company. A credit card debt collection agency is its own business comprised of debt collectors who work around the clock to collect unpaid debt.

How They Make Money

A credit card debt collection agency makes a deal with the credit card company to receive a portion of what they collect from each delinquent account. For example, if they are able to get a debtor to pay $5,000 of their debt, the collection agency may receive around 10 to 20% of the total amount collected (in this case, between $500 and $1,000).

A Collection Agency’s Tactics

A credit card debt collection agency is not shy and comes on strong to collect any debt they can. They call the debtor repeatedly and also send letters or emails. They may even visit your home or place of employment. They persistently attempt to persuade each debtor to pay his or her outstanding balance.

What a Notice Looks Like

A letter from a credit card debt collection agency will ask (and sometimes insist that) a debtor makes a payment. The letter will inform the debtor that he or she has the right to dispute the debt if they believe it to be incorrect or out-of-date.

The Phone Call

If you fail to respond to the initial letter, that’s when a credit card debt collection agency begins to apply more pressure. They’ll start calling or emailing you; however, the law prohibits these agencies from calling debtors during a time that may be “inconvenient” (i.e. early in the morning or late at night). The debt collectors are told to take “no” for an answer and will try to get the money any way they can – through guilt, pressure, or perseverance. By law, however, debt collectors cannot verbally threaten or harass debtors in any way. They cannot threaten to take the debtor to court, or use foul language when speaking with you.

How They Affect Your Credit Score

Having a credit card debt collection agency become involved in your financial affairs is never good. As if having credit card debt isn’t stressful enough, receiving constant calls, emails, and letters asking for prompt payments can make anyone’s head spin. The damage, however, does not stop there. The involvement of a credit card debt collection agency in one of your accounts will show up on your credit report and thus significantly lower your credit score. If you pay off your outstanding debt, you may negotiate with the agency to have their presence remove from your credit report. This is a time-consuming and often costly undertaking, however.