UK card spending has increased to a two-year high, while delinquencies have dropped to a two-year low, quarterly data by credit analysts Fico revealed.
FICO’s Benchmark Reporting Service, which compares overall market performance in the UK cards market with individual card issuers’, found that average total sales on classic cards (all those excluding premium student and Irish cards) were GBP550 a 14% increase since September 2011.
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However, premium card spending dropped, which FICO attributed to lower spending by newer account holders.
The data also revealed strong payment performance, with payments to balance up 19% from September last year. The percentage of accounts that were one cycle (30 days) or two cycles delinquent was at a two year low.
Frans Labuschagne, FICO’s managing director in EMEA said: "While the gains here may be modest, the higher card spending suggests consumers have more confidence in their financial outlook. They also continue to demonstrate the good repayment habits that protect their ability to spend.
On the other hand, the lower-than-usual spending over the past six months on premium cards — which comprise about 24 percent of all UK cards — seems to be the result of lower credit lines on new premium cards."
The data sample represented 26 million accounts about half of all credit cards issued in the UK.
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