The FICO UK credit card market report for October reflects the typical trend of lower spend before the Christmas rush. But average balances continued their upward trajectory year-on-year. The financial pressures facing many UK households are also evidenced in falling monthly and annual payments to balance.

FICO UK credit card market report: October 2023

Sales dropped 3% from September, but are still 6% higher than October 2022. Average balances fell slightly month-on-month, down 0.4%. However, they remain 9.8% higher than the previous year.

Once again, the percentage of payments to balance fell, now standing at 37.8%. Customers missing one payment decreased month-on-month by 4.3%. The number of customers missing two payments rose by 8%. The average balance where one payment has been missed continued on an upward trend. It rises 1% from September and 5.5% year-on-year, now standing at £2,180.

FICO notes that it is common to see a dip in spending in the autumn, ahead of higher spending in the run-up to and during the festive season. This year, spending in October fell by 3% month-on-month. It remains higher than October 2022, probably due at least in part to higher prices.

Looking at outstanding balances, the average card balance decreased 0.4% month-on-month. The balance for customers who have missed payments is trending upwards and the percentage of payments to balance has decreased for four months in a row.

Fall in customers missing one payment

37.8% of balances were paid in October, a reduction of 0.7% month-on-month and 6.8% year-on-year. 2022 saw a similar reduction, before increased payments in January 2023. However, it is likely this figure will continue to fall over the next couple of months due to continued financial hardship and increased spend over the festive period.

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By GlobalData

The number of customers missing one payment decreased by 4.3% from September to October. This was expected after the 13.5% increase seen in September. The September increase has rolled forwards. Subsequently, there has been a larger increase in customers now missing two payments in October, an 8% increase month-on-month. Customers missing three payments have experienced more stability, dropping by just 0.4% on the previous month. However, the number of customers missing one, two or three payments remains significantly higher year-on-year.

The average balance for customers missing payments has continued to trend upwards during 2023. The average balance for one missed payment increases 1% month-on-month to £2,180 and 5.5% year-on-year. A similar pattern is seen for the average balance for three missed payments. This increases 0.4% month-on-month to £2,950, a 2.4% increase year-on-year. However, customers missing two payments have seen their average balance reduce by 0.7% to £2,585, although this is still 1.3% higher than the same month in 2022.