FICO highlights rise in UK cardholders missed credit card payments image credit shutterstock

The FICO UK Credit Card Market Report for March 2024 suggests a fairly stable picture of consumer credit usage. Many of the trends are following the usual annual patterns. However, spend dropped to its lowest level since March 2023. This may reflect the influence of poor weather conditions on consumer activity. But missed credit card payments also continue to be erratic.

FICO UK Credit Card Market Report March 2024 highlights

  • Average UK credit card spending fell by 2.8% month-on-month to £765, the lowest level for 12 months
  • Average credit card balances fell slightly on the previous month but remain 7.2% higher than 2023 at £1,760
  • The number of accounts with one missed payment rose more than 15% compared to February 2024, but is slightly lower than March 2023
  • More accounts missed two and three payments than in March 2023
  • Average credit limits increased on the previous month as well as the previous year

FICO comment

With inflation remaining high, spending was naturally higher in March 2024 than the same month last year. However, with spending at its lowest point for 12 months, there’s a clear picture of a depressed consumer market. The poor weather and continuing inflationary pressures are taking their toll on retail spending.

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Credit card providers should be aware that the percentage of payments to balance is continuing its general downward trend. It falls again, by 0.2% on the previous month and 4.2% year-on-year. Salaries are not keeping pace with higher costs. With savings no longer able to fill the gap, this trend is likely to continue for some time.

Continuing an erratic trend, the percentage of customers missing one payment rose by 15.3% from February to March. This metric showed a 10.9% drop from January to February. This up and down pattern has been seen for the last couple of years. Although 0.9% down year-on-year, it has been trending steadily upwards since April 2022.

Financial stress: rise in customers missing two payments

The upward trend of missed payments is more noticeable for customers missing two payments. This percentage has increased 3.9% on the previous month and 5.5% on the previous year.

Customers missing three payments is 8% higher than this time last year, albeit 1.1% lower month-on-month.

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Looking at the outstanding balances on those accounts with missed payments, there has been a month-on-month decrease for those missing one and two payments. However, for all customers missing one, two or three payments, there has been a year-on-year increase.

The other measure of financial stress is the percentage of customers using credit cards to take out cash. The percentage of accounts using their cash limit fell by 2% since the previous month. Despite this reduction, cash sales remain slightly higher than the same time last year and are likely to increase during the summer months.