The average spend on UK credit cards in March was 9% lower than it was in the same month last year, data published by FICO has revealed.

The software provider’s figures showed that March saw the average spend on UK credit cards increase on a monthly basis by £13 to £560.

However, March data also showed the second consecutive fall in the percentage of payments to balance, by a further 4%, making it 1.5% lower than a year ago. In the three months to March 2020, this fell 1.2% but the same period this year has seen a drop of 11.5%.

FICO also noted that compounding this is a further decrease in average card balances falling £13, or 1%, and reaching another over two-year low.

“Our March data shows the impact of what is hopefully the last full month of a national lockdown and the ongoing financial support, with fewer accounts exceeding their limit, falling card and cash usage and low missed payment rates,” commented Steve Hadaway, who oversees FICO’s operations in EMEA.

“But we may be starting to see a deterioration in affordability, with a lower percentage of payments to balance and slowly increasing volumes of accounts with missed payments. With the lockdowns ending and the opportunities to spend increasing, April will be a pivotal month in starting to reveal the true state of consumer finances.”

FICO also reported that March saw a shift in consumers paying greater than the amount due on their cards to paying the amount due or less. Since January, there has been a 13% increase in those paying the amount due, compared to a drop of 5% in the same period last year that shifted to paying the full amount.

The software firm suggested these are further signs that financial circumstances have resulted in some consumers’ inability to pay their outstanding amount due, or as much as they were paying previously, combined with a “conscious decision to pay less of their debt”, with April overseeing the easing of lockdown restrictions.

Hadaway added: “The increased spending opportunities will highlight if any extra spend is down to those who’ve built up their savings pot or whether a proportion are consumers wanting to take advantage of the newfound freedom even if their financial future is uncertain.

“The impact of the sustainability of certain businesses will also start to be reflected next month. It will be crucial for issuers to be on alert for any signs of financial stress in their customer base, and have systems, strategies and treatments ready to respond to what may be quickly changing customer circumstances.”

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