FICO UK Credit Card Market Report: May 2024
Spending and balances follow usual patterns although signs of financial stress seen in
Highlights
-
Credit card spending fell
2.9% from April to May 2024, now standing at an average of£805 , however it was still0.6% higher than May 2023 -
In line with lower spending, average balances were
0.3% lower in May than April, but6.3% higher than May 2023 -
After falling from March to April, the number of cardholders who missed one payment increased by
8.4% from April to May 2024 -
The average balance for cardholders missing one payment has remained higher year-on-year for two years, currently standing at
£2,225 -
The number of consumers withdrawing cash on their credit cards rose by
2.2% month-on-month, to3.3% in May, another indicator of potential financial stress
FICO Comment
Although inflation remained high, spending fell from April to May. However, as the Summer holiday season approaches, spending is expected to follow the usual pattern and increase over the coming months. As spending increases, it is likely that payments to balance will fall, leading to higher average balances and requiring further vigilance from lenders.
Missed payments remain a particular area of interest for lenders, increasing by
Some
The percentage of cardholders missing three payments continues to trend up, having increased for three consecutive months. In May 2024, there was a
With missed payments rising, the average missed payment balances for one, two and three month levels remain higher year-on-year. For cardholders who have missed one payment, the average balance has now been higher year-on-year for more than two years, currently standing at
The other indicator of financial stress is cash withdrawals on credit cards. Since March, cardholders have been increasingly withdrawing cash on their credit cards, with
Key Trend Indicators –
Metric |
Amount |
Month-on-Month
|
Year-on-Year
|
Average |
|
- |
+ |
Average Card Balance |
|
- |
+ |
Percentage of Payments to Balance |
|
+ |
- |
Accounts with One Missed Payment |
|
+ |
+ |
Accounts with Two Missed Payments |
|
- |
+ |
Accounts with Three Missed Payments |
|
+ |
+ |
Average Credit Limit |
|
+ |
+ |
Average Overlimit Spend |
|
+ |
- |
Cash Sales as a % of Total Sales |
|
+ |
- |
Source: FICO
These card performance figures are part of the data shared with subscribers of the FICO® Benchmark Reporting Service. The data sample comes from client reports generated by the FICO® TRIAD® Customer Manager solution in use by some
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, insurance, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 4 billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. The FICO® Score, used by
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For further comment on the FICO
FICO
Wendy Harrison/Parm Heer
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0208 977 9132
Source: FICO