The average spend on credit cards fell by £33 to £547 in February, with sales 16% lower than a year ago, new figures from FICO have indicated.

FICO said the fall will “ring alarm bells” for card issuers, as the percentage of payments to balance fell by 8% in February and is now only 2% above the same month last year.

The analytics firm suggested that historically, the percentage of accounts missing one payment decreases after the impact of Christmas and sales spending in January, and while February 2021 proved to be no different, the decrease was lower than in 2020.

The FICO data for February revealed a decrease in both the proportion of accounts with two missed payments and the balances at 33% and 16% lower respectively than the same time last year.

Principal consultant for FICO Advisors, Stacey West, commented: “This drop is opposite to the usual trend we see at this time of year. However, with a full lockdown in place, the uncertainty surrounding foreign summer holidays ongoing and the ongoing vaccination programme, this is not unexpected.

“Our February data reflects another month in lockdown and government support, with falling average spend, lower general card and cash usage and decreasing delinquency rates.

“Those able to save have put more aside but those suffering from financial stress have seen no change in the circumstances contributing to their situation. Consequently, FICO has seen a continuing increase in the average amount consumers are spending over their credit card limit, which could be a clear sign of financial stress.”

Average balances on accounts missing one, two or four-plus payments increased, although at a lower rate than they did in February last year. The average balances on accounts missing two payments are £217 or 9% higher than a year ago, and FICO noted this has been driven by accounts more than one year old – as those under a year old saw a second consecutive fall.

Three missed payment average balances are £493 higher year-on-year while four missed payments plus are £372 up, which FICO stated was an “over two-year high”.

West continued: “April’s data will show whether the easing of lockdown has an impact – and what sort of financial pressure that might create.

“With sectors such as non-essential retail, personal care and outdoor attractions as well as outside hospitality and holiday lets opening from 12 April, we will see whether consumers remain cautious in their spending habits – perhaps waiting until they have received both doses of the vaccine – or whether the temptation to take advantage of the new spending opportunities will be too much to resist, even for those who haven’t been able to accrue savings over the last year.”

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