The latest figures from the FICO UK Credit Card Market Report for July 2024 reveal a drop in credit card spending, following seasonal trends seen in previous years. However, the data also shows an increase in missed payments, particularly among established cardholders who have had their accounts for between one and five years.
In July, average spending on credit cards fell by 2.7% compared to the previous month and 1.2% year-on-year, bringing the average spend down to £815. This decline follows typical seasonal patterns, but the rising number of missed payments is cause for concern. Customers missing one, two, and three payments increased in July, with those missing two payments showing a notable 2.3% rise, reversing the 6.5% drop recorded in June.
FICO’s data also highlights a 5.3% year-on-year increase in average credit card balances, reflecting the ongoing impact of inflation. The average balance now stands at £1,800, unchanged from June but significantly higher than last year.
The rise in missed payments is most prevalent among established customers, many of whom took out credit cards during the pandemic. These customers may have benefitted from promotional offers, such as balance transfers, which are now expiring. As these offers end and higher APRs come into effect, some cardholders may be struggling to keep up with repayments. This demographic has the highest percentage of missed payments.
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