According to FICO, UK customers with an established credit card account in February were 83% more likely to have missed two payments than on average.

In addition, the predicted unpaid average balance by people who have held a credit card for between one and five years was 69% higher than for all card accounts.

The February data gathered are in line with a previous report published by FICO in March, which claimed that people spent on average £755 using their credit cards in January 2023 – an 8% drop compared to December 2022.

The overall balances across all accounts were just 0.6% lower in January 2023 than in December 2022, dropping to £1,650.

As a result of missing payments, more and more customers are faced with rising interest rates. According to FICO, the average interest per active account was 19% higher in February, the steepest rise since July 2020, shortly after Covid struck.

“All of these trends will be of concern to risk managers”, the report states. “Customers who have taken advantage of promotional offers in the past may now be struggling to transfer these balances elsewhere and are left with higher balances, on a high-interest rate with a higher minimum due each month.”

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Among those struggling with payments, around 32% felt that their bank was not doing enough to support them, according to a survey conducted by Chetwood Financial in November 2022 involving 2,000 UK adults.

For that reason, Chetwood Financial experts have long been advocating for fintechs and small banks to play a more significant role in giving their customers access to information and educational resources about safe and responsible credit usage.

“Sadly, there is nothing individual consumers can do to totally insulate themselves from the cost-of-living crisis from day to day, but financial services can help protect them from unseen expenses and shocks”, said Andrew Arwas, director of Transformation at Chetwood Financial in a written comment for RBI.

FICO is a data analytics company providing access to information to people and businesses worldwide. Founded in 1956, the company supports businesses in nearly 120 countries.