Credit card balances in the U.S. now sit at about US$1.26t, with more borrowers falling 90+ days behind and many using plastic just to cover essentials. That combination can strain households, yet it can also shift attention to companies that specialize in debt collection and credit recovery. This article walks through three stocks exposed to this trend and explains how each might fit, or might not fit, into your watchlist.

The stocks covered below are just a starting sample from this corner of the market, and the full screen surfaced 7 more companies with equally compelling narratives that are not discussed in the article. If you want to go deeper into this theme, head straight into the Debt Collection and Credit Recovery Services screener to identify, compare, and analyze potential high-conviction ideas that fit your own criteria.

Encore Capital Group (ECPG)

Encore Capital Group is a specialty finance company that buys portfolios of defaulted consumer debt at a discount and then works with borrowers to repay and rebuild their finances. Almost all of its roughly US$1.9b in revenue comes from this portfolio purchasing and recovery activity, making it tightly tied to trends in non performing consumer loans. The stock has a market value of about US$2.1b.

Given today’s record U.S. credit card balances and rising delinquencies, Encore Capital Group sits at the center of a growing pool of charged off accounts that lenders are willing to sell. Recent results show record portfolio purchases, record collections and a refinancing package that management expects will cut interest costs and lower leverage. A low P/E and high Return on Equity point to a business that the market is still pricing cautiously. The catch is that Encore leans heavily on U.S. credit conditions and uses significant borrowing to fund its portfolios, so any shift in regulation, funding costs or consumer behavior could quickly change the picture.

Encore Capital Group sits at the crossroads of record card balances, a low P/E and high ROE that hint at something the market may be missing. Get the full picture in the 4 key rewards and 1 important major warning sign

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Encore Capital Group and the two other stocks in this article all surfaced from a single Simply Wall St screen, but the real edge is in setting up your own rules. Use our flexible Screener to mix valuation, quality, balance sheet and risk filters, or tap into our curated Investing Ideas for ready made starting points.

Credit Corp Group (ASX:CCP)

Credit Corp Group runs a mix of debt purchasing, collections and consumer lending across Australia, New Zealand and the U.S., working with banks, utilities and telecom providers to recover overdue accounts and offer new credit products. It generated about A$220 million from Australia and New Zealand debt ledger purchasing, A$150 million from U.S. debt ledger purchasing and A$215 million from consumer lending in Australia and New Zealand, which gives it a fairly balanced split between collecting old debts and issuing new loans. The stock is currently valued at about A$912 million.

Investors watching rising consumer debt stress may find Credit Corp Group hard to ignore. It sits at the junction of growing global indebtedness, a sizeable U.S. purchasing pipeline and new digital lending products that target underserved borrowers. At the same time, earnings growth has been modest, funding depends heavily on external borrowings and a key High Court case adds an extra layer of uncertainty. The stock combines a low P/E multiple with a relatively high dividend yield and a refreshed board led by a new chair in 2026. Together, these factors create a mix of income appeal and the possibility of a rerating if its U.S. and U.K. expansion and credit card distress tailwinds develop as management expects.

Credit Corp Group’s low P/E and relatively high dividend yield hint that the stock and its U.S. and U.K. expansion story may be underappreciated, yet the key legal and funding risks are not fully obvious in the headline numbers. Get the missing context in the 4 key rewards and 2 important warning signs (1 is major!)

PRA Group (PRAA)

PRA Group buys portfolios of nonperforming consumer loans from banks and other lenders across the U.S., Europe, the U.K., South America, Canada and Australia, then works those accounts over time to recover a portion of what is owed. The company was founded in 1996 and is headquartered in Norfolk, Virginia, and today has a market value of about US$745 million.

PRA Group provides focused exposure to unpaid consumer debt that is now appearing in U.S. credit card data. The company trades at a low price-to-sales multiple, is returning capital through a US$150 million buyback program, and has reported higher revenue and earnings in the first half of 2026, even after being removed from several S&P indices in June. For patient investors, that mix of improving profitability and index exclusion may present an interesting situation to analyze. However, its reliance on borrowing and the cost of acquiring portfolios remain important pressure points that you need to understand before making any decisions.

Revenue momentum and that US$150 million buyback hint that PRA Group’s recovery story might be further along than the market credits. See how the 2 key rewards and 1 important major warning sign quietly reframes the risk reward profile.

Seeking Alternatives Before The Crowd Moves

Fresh ideas do not stay under the radar for long. Once momentum builds, entry points can slip away before you notice. Scan these breakout themes now and explore them before they become widely followed.

• Find early price strength in cash rich companies by running the list of solid balance sheet and fundamentals (48 results) while it still highlights stocks the crowd has not fully priced in.
• Explore potential income and stability traits by checking the 9 dividend fortresses before yields are affected by buyers focusing on the same defensive stories.
• Position ahead of developments in automated technology by filtering for curated opportunities through the 37 robotics and automation stocks while they are still less widely tracked.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.