UK FICO Credit Card Market Report May 2022



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Are credit card refunds given priority? Obvious pragmatic financial management, as the percentage of balance payments increases month by month

LONDON–(BUSINESS WIRE)–FICO’s May 2022 UK Card Trends Report suggests that while cost of living pressures are definitely starting to have an impact, cardholders are also taking an approach pragmatics of financial management. The monthly report based on Britain’s largest card data consortium shows that the percentage of payments to balance continues to trend upwards. Alongside the fact that average spending on credit cards fell by £7 from April, the data suggests consumers are spending and paying sensitive.

Strong points

  • Average total sales at £753 – down £7 from April

  • Almost static average active balance month over month – only 0.2% increase

  • 6.1% increase in balance payments, suggesting continued pragmatic management of credit card accounts

  • A slight month-over-month increase in the average balance of accounts missing 1 and 2 payments is a potential warning sign for lenders

Key Trending Indicators – UK Charts May 2022

Metric

Rising

month after month

To change

From year to year

To change

Average credit card spend in the UK

£753

-0.9%

+15.7%

Average card balance

£1,555

+0.2%

+5.5%

Percentage of balance payments

42.06%

+6.1%

+17.9%

Accounts with a missed payment

1.45%

+7.4%

+3.9%

Accounts with two missed payments

0.24%

-10.1%

-6.6%

Accounts with three missed payments

0.16%

+1.9%

-9.8%

Average credit limit

£5,500

+0.2%

+2.7%

Average spend over limit

£120

+1.7%

-16.4%

Cash Sales / Total Sales

1.25%

+3.1%

-10.6%

Source: FICO

FICO Commentary

Unlike some of the other consumer spending data, there are no major shocks to the way UK consumers use and manage their credit cards. While spending was down slightly month-over-month, there are clear signs that the importance of credit cards in managing day-to-day finances is being recognized in the way repayments are handled.

Like the April data, signs of the cost of living crisis are still limited. Lenders, however, will want to be alert to early signs of financial distress. May FICO data shows a 7.4% increase in accounts missing a payment; lenders should follow if this trend – which was already evident in April – continues and if the percentage of accounts missing two payments also increases.

Lenders can use segmentation analysis of their portfolios to ensure that their web and mobile applications encourage distressed consumers to get in touch at the first signs of trouble, and to consider establishing special payment plans for those who struggle to stay on top.

These card performance numbers are part of the data shared with subscribers of the FICO® Benchmark Reporting Service produced by FICO® Advisors, the business advisory arm of FICO. The sample data comes from customer reports generated by the FICO® TRIAD® Account Manager solution used by approximately 80% of card issuers in the UK.

About FICO

FICO (NYSE: FICO) powers the decisions that help people and businesses around the world thrive. Founded in 1956, the company pioneers the use of predictive analytics and data science to improve operational decisions. FICO holds more than 200 U.S. and foreign patents on technologies that increase profitability, customer satisfaction and business growth in financial services, telecommunications, healthcare, retail and many other industries. With FICO solutions, businesses in more than 120 countries are doing everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of planes and rental cars are in the right place at the right time.

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

FICO and TRIAD are registered trademarks of Fair Isaac Corporation in the United States and other countries.

For further comment on FICO UK credit card activity, contact:

FICO UK PR Team

Wendy Harrison/Parm Heer/Matthew Enderby

[email protected]

0208 977 9132

Source: FICO

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