FICO UK Credit Market Report April 2021: End of Lockdown Increases Credit Card Spend 12 Percent

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LONDON, June 14, 2021 /PRNewswire/ —

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Highlights

  • Second consecutive month increase in credit card spend – 12 percent – and the largest monthly increase for over two years
  • Percentage of payments to balance increased for the first time since December, by 3 percent
  • The percentage of accounts exceeding their limit increased for the first time since December 2019
  • Cash usage increases for the first time in seven months – albeit only by 2 percent

Global analytics software provider FICO today released its analysis of UK card trends for April 2021, which shows the impact of the opening up of hospitality and retail on April 12. The figures include a 12 percent rise in card spend and more customers exceeding their card limit. Missed payments were still below historical trends, probably due to increased savings and government support, which continues to blur the picture of card users struggling with debt issues, making it more difficult for lenders to manage.

The average spend on UK credit cards increased for the second consecutive month, by £65 to £625 in April 2021. This is the largest monthly increase in spend for over two years. As April 2020 was a lockdown month, it is not surprising to see sales are 22 percent higher year on year.

April 2021 saw a shift in the way consumers pay their credit card debt, with a move to paying the minimum or full balance. In the four months to April 2020, 27 percent fewer accounts paid the minimum amount as the majority shifted to paying less. In the same period this year, the proportion paying the minimum has increased by 20 percent, which will increase the volumes qualifying for persistent debt treatment.

Missed payment rates remain low
April 2021 shows month-on-month improvements in the percentage of accounts missing payments and their associated percent of balance to total balance. Until the furlough support is removed, this trend may continue, as the combination of these payments and the extra savings influence consumer behaviour.

Average balances on accounts missing one payment increased £26 month on month, although it is 13 percent lower than a year ago. For accounts missing two payments, the average balances are £126 or 5 percent higher than April 2020. 

These card performance figures are part of the data shared with subscribers of the FICO® Benchmark Reporting Service. Issuers wishing to subscribe to this service can contact staceywest@fico.com. 

About FICO

FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956 and based in Silicon Valley, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. Learn more at https://www.fico.com

FICO and TRIAD are registered trademarks of Fair Isaac Corporation in the U.S. and other countries.

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