Yes, credit card companies can sell your debt, and many do. But they don’t all behave the same way. Some banks sell almost every charged-off account to a debt buyer within months. Others keep their charged-off accounts and collect them themselves. A few do both.
SmartDispute looked at the charge-offs and collection accounts on the first credit reports of 591 members to see which banks sell and which ones keep the debt. Here’s what we found, what it means for who you’ll deal with, and what your credit report should show after a sale.
Key Takeaways
- 84% of members had at least one charge-off on their first credit report, and 72% had at least one the lender still held with a balance.
- Credit One Bank and The Bank of Missouri sold about 84% of their charged-off accounts to debt buyers in our data.
- Chase, First Premier, Discover, American Express, Merrick Bank, Wells Fargo, and Bank of America didn’t have a single account with a debt buyer.
- Capital One does both. It still held about two-thirds of its charged-off accounts, and the ones it sold typically reached a debt buyer about 20 months after the first missed payment.
- Once a debt is sold, the bank’s account should show a $0 balance. Only the new owner should report what you owe.
About the Data
The data comes from the first credit report of each of 591 SmartDispute.ai members, pulled when they joined, before any disputes. It includes two kinds of accounts:
- 2,605 charge-offs, reported by the original lender. We left out student loans, government debts, and phone bills, which the app also groups with charge-offs.
- 1,543 collection accounts, reported by debt buyers and collection agencies. Each one names the original creditor, which is how we can see where a bank’s debts ended up.
When the same account appeared as separate entries at different bureaus, we combined them so each account is counted once. The data shows where each debt stood on one date, so a debt a bank still held then could be sold later.
How Common Are Charge-Offs?
495 of the 591 members, 84%, had at least one charge-off on their first report. The median was four. 425 members, 72%, had at least one that the original lender still held with an unpaid balance.
The median balance on those held charge-offs was $1,456, and the median total per member was $7,925. Most were credit cards:
| Type of account | Share of charge-offs | Median balance still owed |
|---|---|---|
| Bank credit cards | 49% | $1,763 |
| Personal and online loans | 13% | $2,659 |
| Store and retail cards | 11% | $1,222 |
| Buy now, pay later and lease-to-own | 8% | $317 |
| Auto loans | 7% | $10,519 |
| Credit-builder accounts | 4% | $127 |
| Cash advance apps | 3% | $173 |
Charged-off cards often owe more than their limit. On the cards that reported a credit limit, the median balance was 1.21 times the limit, and 78% were over it, because interest and fees kept adding up until the account was charged off.
Which Banks Sell Charged-Off Debt?
To see who sells, we compared two numbers for each bank: charge-offs it still held with a balance, and collection accounts held by debt buyers that named it as the original creditor. The share with debt buyers shows how often that bank’s debts had been sold.
| Original creditor | Still held by the bank | With a debt buyer | Share with a debt buyer |
|---|---|---|---|
| Credit One Bank | 27 | 154 | 84% |
| The Bank of Missouri (Total, Fortiva, Milestone) | 9 | 84 | 84% |
| WebBank (Avant, Fingerhut) | 12 | 43 | 75% |
| Comenity | 11 | 34 | 71% |
| Synchrony Bank | 34 | 56 | 56% |
| Citibank | 42 | 44 | 51% |
| Barclays | 11 | 7 | 39% |
| Capital One | 172 | 86 | 32% |
| Navy Federal Credit Union | 35 | 8 | 19% |
| Affirm | 136 | 12 | 8% |
| Chase | 83 | 0 | 0% |
| First Premier Bank | 107 | 0 | 0% |
| Discover | 57 | 0 | 0% |
| American Express | 55 | 0 | 0% |
| Merrick Bank | 35 | 0 | 0% |
| Wells Fargo | 21 | 0 | 0% |
| Bank of America | 19 | 0 | 0% |
The share also counts debts placed with a collection agency, which don’t change who owns the debt. For most of these banks, agency placements were rare.
Banks That Usually Sell
Credit One Bank, The Bank of Missouri, WebBank, and Comenity sold most of their charged-off accounts, and quickly. Their debts typically reached a debt buyer five to seven months after the first missed payment, right after the account was charged off.
- Credit One’s debts went mostly to LVNV Funding, a company in the same corporate family.
- The Bank of Missouri’s went mostly to LVNV, Midland Credit Management, and Jefferson Capital.
- Comenity’s store cards went almost entirely to Midland.
If you had one of these cards, expect to deal with a debt buyer rather than the bank.
Banks That Keep Their Debt
Chase, First Premier, Discover, American Express, Merrick Bank, Wells Fargo, and Bank of America didn’t have a single debt with a debt buyer in our data. Their charged-off accounts stayed with the bank, still showing the unpaid balance.
That doesn’t mean the debt goes away. These banks collect it themselves, often through law firms, a pattern SmartDispute sees often in member reports. If your charge-off is from one of these banks, the bank is the one you’d pay, settle with, or dispute with. Our guide to credit card charge-offs covers what to do if you’re sued.
Capital One Does Both
Capital One had more charge-offs in our data than any other lender, and it both keeps and sells. It still held 172 charged-off accounts with a balance, while debt buyers held 86 of its debts, most with Portfolio Recovery Associates, LVNV, and Midland.
The timing tells the story. Capital One debts typically reached a debt buyer about 20 months after the first missed payment, compared with about 7 months for Credit One. That suggests Capital One often works an account itself for a year or more before selling it, though our data can’t show what happened in between. If you have a Capital One charge-off, it may still be with Capital One today and be sold later.
Synchrony and Citi Split About Evenly
Synchrony Bank and Citibank were close to half and half. Synchrony’s debts went mostly to Portfolio Recovery Associates and Midland, and Citi’s to Midland and Portfolio Recovery Associates. Both usually sold within about eight months, but some Citi accounts sold much later.
What “Transferred” Means on a Charge-Off
When a bank sells or moves an account, its tradeline usually changes to “transferred” or “sold” with a $0 balance. In our data, 453 charge-offs showed as transferred at one or more bureaus, and nearly all had a $0 balance.
How long that transferred account stays on your report varies by lender:
- Capital One’s transferred accounts were recent, typically about two months past their last activity. That fits a bank that reports the transfer briefly and then removes its account.
- Comenity, The Bank of Missouri, and WebBank left their transferred accounts on the report for about two years after their last activity.
- Online lenders such as Upstart, Upgrade, and LendingClub also showed many transferred accounts. For them, “transferred” may mean the loan moved to another lender or servicer, not to a debt buyer.
A transferred account with a $0 balance is normal. A transferred account that still shows a balance isn’t, because the lender no longer owns the debt.
What Your Credit Report Should Show After a Sale
Equifax notes that a sold debt “may appear twice on credit reports,” once from the original creditor and once from the debt buyer (Equifax). Two entries can be accurate. Two balances aren’t:
- The bank’s charge-off should show a $0 balance and a status that says it was sold or transferred.
- The debt buyer’s collection account should show the balance and name the bank as the original creditor.
- Both should use the same date of first delinquency, so the debt comes off your reports at the same time.
In our data, some sold debts were still reported with a balance by the original lender. It happened most with Credit One. Our article on Credit One charge-offs reported twice explains what we found and how to dispute it.
Why It Matters to You
- It tells you who to deal with. If the bank sold the debt, paying the bank won’t resolve it. If the bank kept it, a debt buyer has no claim to it.
- It changes how pay for delete works. Only the current owner can agree to it. Our article on what to check before paying a charge-off explains how to find the owner.
- It changes what to dispute. A charge-off the bank still owns is disputed with the bank. A sold debt has two entries to check: the bank’s balance should be $0, and the buyer’s account should be accurate. Our article on charge-offs vs. collections covers the difference.
Frequently Asked Questions
Can credit card companies sell your debt?
Yes. Selling charged-off debt is legal and common. A 2013 Federal Trade Commission study found that debt buyers paid an average of about 4 cents per dollar of debt (FTC).
Does Capital One sell its debt?
Some of it. In our data, debt buyers held about a third of Capital One’s charged-off debts, mostly Portfolio Recovery Associates, LVNV Funding, and Midland. Capital One kept the rest, at least at the time of the report.
Does Chase sell charged-off debt?
Not in our data. None of the collection accounts we saw named Chase as the original creditor, and Chase’s charged-off accounts stayed with Chase, still showing their balances.
Who buys charged-off credit card debt?
In our data, the largest buyers were LVNV Funding, Midland Credit Management, Jefferson Capital Systems, and Portfolio Recovery Associates. Our article on the most common debt collectors has the full list.
How do I know if my debt was sold?
Check your credit reports. If the bank’s account shows a $0 balance with a sold or transferred status, and a collection account names that bank as the original creditor, the debt was sold. A debt buyer that contacts you must also send you a validation notice.
Can a debt be sold more than once?
Yes. A debt buyer can sell to another buyer. Only the current owner should report a balance, and the date of first delinquency should stay the same.
What’s the Next Step?
Pull your three credit reports and list every charge-off. For each one, check whether the bank still shows a balance, and look for a collection account that names the same bank as the original creditor. If you find both, only one of them should show what you owe.
SmartDispute lays out your charge-offs and collections from all three bureaus side by side, flags debts that appear with more than one balance, and drafts suggested disputes for you to review, change, and mail yourself. See how SmartDispute works.
