UK card trends for May 2022

Global analytics provider, FICO (www.fico.com) latest report for May UK card trends suggests that whilst cost-of-living pressures are definitely starting to have an impact, cardholders are also taking a pragmatic approach to financial management.  

FICO’s monthly report based on the largest consortium of UK cards data shows that the percentage of payments compared to balance continues to follow an upward trend.  Alongside the fact that average spend on credit cards has dipped by £7 compared to April, the data suggests consumers are being sensible with spend and payments.

“In contrast to some of the other consumer spending data, there are no sharp shocks in how UK consumers are using and managing their credit cards.  While spend has dipped marginally month-on-month, there are clear signs that the importance of credit cards in handling daily finances is recognised in how repayments are being managed,” says FICO.

Much like the April data, the signs of the cost-of-living crisis are still limited.  Lenders, however, will want to be alert to the early signs of financial distress. The FICO May data shows a 7.4% increase in accounts missing one payment.  “Lenders should track if this pattern – which was already evident in April – and monitor the situation as the percentage of accounts missing two payments rises.  Lenders can use segmentation analysis on their portfolios to ensure that their web and mobile applications encourage consumers in distress to make contact at the first indications of difficulty, and to consider establishing special payment plans for those struggling to stay on top.”

Part of the data shared with subscribers of the FICO® Benchmark Reporting Service produced by FICO® Advisors, the business consulting arm of FICO, card performance figures comes from client reports generated by the FICO® TRIAD® Customer Manager (www.fico.com/en/products/fico-triad-customer-manager) solution used by over 80% of UK card issuers.