The percentage of credit cards that are overlimit in the UK are at a two-year low, analytics software company FICO concluded in its quarterly card data release.
UK cardholders appear to have become more diligent when it comes to their credit spending, with overlimit accounts among classic cards at their lowest level (just over 2%) since 2002.
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Student and Euro (Irish) accounts are also at their lowest overlimit percentage since March 2011.
FICO’s data found that card accounts opened within the last twelve months had riskier payment patterns than card accounts that had been open for five years or more.
The payments-to-balance ratio for ‘veteran’ accounts open for more than five years reached a three-year high with 26% in January. ‘Established’ accounts open for one to five years reached 30% in February.
The utilisation percentage on new card accounts has reached its highest level since late 2008, whereas this percentage on veteran and established accounts has continued to fall. Established card holders appear to have high-enough limits to support their spending.
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By GlobalDataNigel Brayne, senior director of Global Business Consulting at FICO, said: "This positive performance may seem surprising when the economy is struggling, but it reflects a number of factors."
"First, many people have erratic cash flow and need their cards more than ever, so they are being careful to avoid overextending themselves, or risking fees. Second, some card issuers are beginning to make pre-collections contact with customers, which can help cardholders avoid running up troublesome debt levels."
The data sample studied by FICO represents around half of all credit cards issued in the UK (26m accounts).
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