FICO UK Credit Card Market Report

February 2024 - Seite 2

0.22%

+1.8%

+2.2%

Average Credit Limit

£5,645

+0.2%

+1.7%

Average Overlimit Spend

£85

0%

-6.5%

Cash Sales as a % of Total Sales

0.86%

-0.2%

-0.1

Source: FICO

FICO Comment

UK credit card spending has started to pick up, after the usual seasonal dip in January, increasing by 1.6% on the previous month to an average of £785, an increase of 0.3% on 2023. Although inflation is now stabilising, inflation does remain higher than last year; spend patterns are, therefore, likely to remain high. Higher inflation rates also continue to impact the average credit card balance, which is now £1,770 – 6.6% higher than February 2023.

Credit card providers will also want to monitor the percentage of the total balance being paid. In February this dropped to 36.5%; a 3.1% decrease compared to January and 3.6% lower year-on-year. This has been trending down since May 2022, with reduced pandemic savings no longer helping to pay down balances as much as they were previously.

Lenders will, however, be encouraged that the pattern of missed payments stabilised in February. The number of customers missing one credit card payment decreased by 10.9% month-on-month, to 1.5%. This measure has been erratic for many months, although it has been trending upwards since April 2022. There is also a more obvious overall upward trend for customers missing two payments; especially for those who have had their credit card for less than five years. However, following the usual Christmas spike, this decreased by 10.3% month-on-month in February to 0.3%, while remaining 3.6% higher than the same month in 2023.

Another important data point is the average balance on accounts with one missed payment. This has increased for the second consecutive month and now stands at an average of £2,255. This is also 5.7% higher than the same period in 2023. For customers missing two payments, this has increased by 4.7% month-on-month to £2,705, with a larger number of accounts and balances missing payments rolling forwards in their delinquency.