The amount British consumers can borrow on a credit card has reached its highest point in two years, according to research by software company FICO.

UK card holders are also increasing their spends on credit – card spending is at its highest point since 2011 with a 7.6% yearly rise.

Credit limits rose by 3.9% in the previous year with the increase being driven by accounts that have been open for less than five years, the FICO research found.

Card holders are also becoming more able to pay off their credit card debt, the research indicated. One-cycle balances – where a customer misses a payment for one month – are at their lowest in more than two years, having dropped by more than 16% in the last 12 months.

Nigel Brayne, senior director of global business consulting at FICO, commented that the increase in consumer spending was good news for card issuers. "When they see that these areas are becoming more stable, lenders may offer higher credit lines in order to increase individual customer value," he said.

Lenders should review their qualification criteria to ensure they do not only target low-risk profitable customers, Brayne added. "Ensuring that funds are used will not only help card issuers to operate more efficiently and profitably, but it will also help them mitigate the potential impact of unused exposure on their Basel Capital Reserves," he said.

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The data from FICO

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