FICO UK Credit Market Report August 2021

August saw a two-year low among consumers paying less than the amount owed on cards, although signs of financial pressure can be seen in an increase in the average balance of accounts that have two missed payments and one. further increase in the use of money on cards.

Global analytics software provider FICO today released its UK chart trend analysis for August 2021. Summer vacations and a continued reliance on pandemic-related savings likely contributed to growth in average card spending. But signs of financial pressure are also evident with an increase in average balances on accounts with missed payments and an increase in card usage on cards – another sign of financial stress.

Eight year high for increased spending on UK cards

Average UK credit card spending rose from £ 23 to £ 711 in August 2021. This is the highest level since FICO started compiling data eight years ago. For the third month in a row, pre-pandemic levels have been exceeded, up £ 40 from August 2019.

The change in consumer behavior over the past 12 months is also illustrated by a 25% increase since January 2021 in average credit card sales.

And it looks like pandemic-related savings are still supporting this spending, as the percentage of payments to breakeven is 28% higher than August 2020, and 24 percent above pre-pandemic levels in August 2019.

Non-payment rates see a month of growth

A less rosy picture is evident when examining data on missed payments. While in August, the percentage of accounts missing payments fell 4.5% month-over-month and their associated balance as a percentage of total balance declined 5.1%, with consumers missing two payments saw their average balance increase by £ 27. That’s 12% or £ 265 more than August 2019.

And the longer the missed payments, the greater the accumulated debt. The average balances of the three missing payments compared to two years ago are 19% or £ 451 higher, and those of the four missing payments + are 16% or £ 429 higher.

These card performance figures are part of the data shared with subscribers of the FICO® reference reporting service. The data sample comes from customer reports generated by the FICO® TRIAD® Client Manager solution used by some 80 per cent of UK card issuers. Issuers wishing to subscribe to this service can contact [email protected]

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