FICO UK Credit Market Report November 2021: Black Friday and Christmas Boost Spend to Over Two-Year High as Payments Start to Drop

LONDON, Jan. 11, 2022 /PRNewswire/ --

Highlights

• Average spend per UK card grows £27 in November – the highest in over two years
• Percentage of payments to balance decreases for only the third time in 2021
• Cash usage continues to grow although still 49 percent below pre-pandemic levels

Global analytics software provider FICO today released its analysis of UK card trends for November 2021. With average spend and cash usage rising, the data was typical of previous festive seasons. However, a drop in the percentage of payments to balance made by cardholders during the month also suggests that lockdown savings may be diminishing.

With the Omicron variant impacting hospitality and retail sales in December, lenders will be looking at whether they need to reintroduce payment holidays as well as returning to the stricter lending policies that were implemented at the outset of the pandemic until the situation becomes clearer.

UK card average spend increases to a new over two-year high
The average spend on UK credit cards increased £27 to £730 in the month, £75 above pre-COVID-19 spend levels. Average sales in 2021 have increased 28 percent, compared to a 1.5 percent drop this time last year. The November increase was reflected in the latest figures from the Bank of England, which show £862 million spent on credit cards in November, the highest total since July 2020.

Percentage of payments to balance falls for the third time in 2021
Reversing the trend seen in October, the percentage of payments to balance decreased in November. This was the third monthly decrease in 2021, although average spend is still 21 percent higher than November 2020 and 28 percent higher than two years ago. Accounts opened less than a year have seen a steady drop in the percentage paying the full balance over the last six months, indicating that fewer consumers can afford to pay off their full balance.

Increased late payments suggest debt is creeping up
Average balances on accounts missing two and three payments increased in November. Accounts opened less than 5 years were the main driver and the newer account holders — opened less than a year — reached over a two-year high for one, two, three and four or more missed payments.

These card performance figures are part of the data shared with subscribers of the FICO® Benchmark Reporting Service. The data sample comes from client reports generated by the FICO® TRIAD® Customer Manager solution in use by some 80 percent of UK card issuers.

Ends

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