FICO UK Credit Market Report June 2021: Consumer Credit Card Spending Above 2019 Levels
Credit card spend 3.5 percent higher than June 2019 - but accounts missing two payments increased 15 percent versus May 2021
LONDON, Aug. 12, 2021 /PRNewswire/ --
Highlights
- Fourth consecutive monthly increase in credit card spend – 6 percent year on year – with spend higher than June 2019 levels
- Further increase in percentage of payments to balance - 2.5 percent – although growth slowing
- 15 percent increase month-on-month in accounts missing two payments
- Cash usage continues to slowly grow, by 9 percent; but still 62 percent below pre-pandemic levels
Global analytics software provider FICO today released its analysis of UK card trends for June 2021. Maintaining the pattern for the year so far, average spend continued to increase compared to 2020.
As the UK was only just coming out of lockdown in June 2020, this rise in spend is unsurprising, but the fact that average spending was 3.5 percent (£23) above 2019 levels suggests that, for those who have been able to save through the pandemic, there is confidence in their future financial stability. However, the percentage of accounts missing payments reflected the fact that not everyone has been able to accrue savings during the last 18 months.
Spend on UK cards continued to increase, along with the percentage of payments
The average spend on UK credit cards increased year-on-year for the fourth consecutive month, by £40 to £691, a larger increase than in May. It also exceeds the June 2019 spend by £23 with the sunny weather and Euro 2020 likely to have contributed to this uptick.
Mixed picture on payments
The percentage of accounts paying the full balance stabilised in June and was 16 percent higher than June 2020. Despite the percentage of accounts paying the minimum payment increasing by 3 percent in June, the proportion is still 11 percent below that seen in June 2019.
Missed payment rates remain low
The percentage of accounts missing one payment increased in May. A proportion of these were unable to make a payment in June, which resulted in a 15 percent increase in the percentage of accounts missing two payments and 9 percent increase in their balance compared to total balance.
Cash usage continues to slowly grow
Cash as a percentage of total spend fell month on month and is 8 percent lower than a year ago and 37 percent lower than June 2019, highlighting the change in attitudes towards cash.
These figures are part of the data shared with subscribers of the FICO® Benchmark Reporting Service. The data comes from reports generated by the FICO® TRIAD® Customer Manager solution in use by some 80 percent of UK card issuers. Issuers wishing to subscribe to this service can contact staceywest@fico.com.
FICO and TRIAD are registered trademarks of Fair Isaac Corporation in the U.S. and other countries.
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