FICO UK Credit Card Market Report March 2022

Rhea-AI Summary

FICO analyzed UK credit card trends for March 2022, revealing a modest reduction in average card spend by 1.99% and a slight dip in average active balance by 0.54%.

However, the percentage of payments to balance rose by 2.32%, indicating responsible financial behavior amid a cost-of-living crisis. Notably, missed payments increased, with one month in arrears up 16.51% month-on-month. These findings suggest consumers are prioritizing repayments while facing rising inflation pressures.

Positive

• Percentage of payments to balance increased by 2.32%, indicating improved repayment behavior.
• Average credit limit rose by 0.15%, suggesting some financial stability.

Negative

• Average card spend dropped by 1.99%, reflecting reduced consumer confidence.
• Accounts with one month missed payments increased by 16.51%, indicating rising financial strain.
• Accounts with two months missed payments rose by over 6%, signaling potential increasing defaults.

Credit card payments yet to show signs of financial distress

LONDON--(BUSINESS WIRE)-- Today, leading applied analytics company FICO released its analysis of UK card trends for March 2022. It appears that repayments remain a priority for credit card holders, suggesting that there will be greater reliance on credit over the coming months as the cost-of-living crisis deepens due to higher inflation.

Highlights

• Average card spend drops marginally by just under 2 percent compared to February
• Small drop in average active balance – just over half a percent
• Percentage of payments to balance, increases by just over 2 percent suggesting pragmatic caretaking of credit card accounts
• Percentage of accounts with one and two months missed payments increases month-on-month

Key Trend Indicators – UK Cards March 2022

Metric	Amount	Month-on-Month Change	Year-on-Year Change
Average UK Credit Card Spend	£691	-1.99%	+23.39%
Average Card Balance	£1,519	-0.54%	+4.13%
Percentage of Payments to Balance	39.63%	+2.32%	+26.25%
Accounts with One Missed Payment	1.64%	+16.51%	+9.67%
Accounts with Two Missed Payments	0.27%	+6.24%	-8.68%
Accounts with Three Missed Payments	0.15%	-7.23%	-17.07%
Average Credit Limit	£5,481	+0.15%	+2.53%
Average Overlimit Spend	£130	+6.56%	-16.67%
Cash Sales / Total Sales	1.29%	+0.55%	-13.86%

Source: FICO

FICO Comment

While the February data from FICO showed early evidence of cost-of-living pressures, in March another pattern has emerged. The percentage of payments to balance has increased – albeit by a marginal 2 percent. This could suggest that some cardholders are taking a pragmatic approach to managing their card repayments so they can continue to have access to this source of funds as pressure on disposable income increases.

There are, however, clear signs of price pressures impacting finances with a 16 percent month-on-month increase in accounts that are one month in arrears. Accounts two months in arrears are also increasing, by over 6 percent month-on-month. However, the percentage of accounts with three missed payments has dropped – by over 7 percent month-on-month.

Another signal of falling consumer confidence is the small drop – less than 2 percent – in spend on cards in March 2022.

Remaining vigilant to repayment trends over the next few months will be critical for lenders to ensure vulnerable households are given the support they need.

These card performance figures are part of the data shared with subscribers of the FICO® Benchmark Reporting Service produced by FICO^® Advisors, the business consulting arm of FICO. The data sample comes from client reports generated by the FICO^® TRIAD^® Customer Manager solution in use by some 80 percent of UK card issuers.

About FICO

FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 200 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 120 countries do everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time.

Learn more at https://www.fico.com

FICO and TRIAD are registered trademarks of Fair Isaac Corporation in the U.S. and other countries.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220531005437/en/

For further comment on the FICO UK Credit Card activity contact:

FICO UK PR Team

Wendy Harrison/Parm Heer/Matthew Enderby

ficoteam@harrisonsadler.com

0208 977 9132

Source: FICO

FAQ

What is the latest FICO analysis on credit card trends in the UK for March 2022?

FICO's latest analysis reveals a modest 1.99% drop in average card spend in March 2022, with a notable increase in missed payments.

How much did the average credit card spend fall in March 2022 according to FICO?

According to FICO, the average credit card spend fell by 1.99% in March 2022.

What percentage of payments to balance increased in March 2022?

The percentage of payments to balance increased by 2.32% in March 2022, suggesting responsible repayment habits.

How many accounts had missed payments in March 2022 based on FICO's report?

FICO reported a 16.51% increase in accounts with one month of missed payments in March 2022.

What is the impact of inflation on credit card usage according to FICO?

FICO suggests that rising inflation pressures are leading to changes in credit card repayment behavior, with more consumers prioritizing repayments.