The average UK credit card spend fell month-on-month by 12% in January to £669, according to new data published by FICO.

Figures also showed the average card balance slipped by 2.4% to sit at £1,512.

Compared to January 2021, the average card spend represented a17.3% annual rise, while the average balance was broadly unchanged, having risen slightly by 0.4%.

The analytics software provider suggested that its its analysis of UK card trends for January 2022 shows that despite increases in the cost of living, consumers are still managing their credit card spend “relatively well”.

FICO’s analysis comes as Chancellor Rishi Sunak prepares to deliver his spring statement on Wednesday. He has previously said he would put in place policies that help families meet the cost of living crisis, such as freezing duties, cutting the tax rate in universal credit, and increasing the national living wage.

Business leaders are, however, calling for a delay to the 1.25% national insurance increase set out in the autumn budget.

“The new data for January 2022 illustrates the continued mixed picture of consumer financial management,” FICO said. “Having seen the percentage of accounts paying their full balance start to drop in December, it was anticipated this pattern – and other signs of financial stress - would be evident in January, particularly in response to rapidly rising inflation.

“However, the FICO data actually suggests continued strong financial management. Month-on-month and year-on-year there were increases in the proportion consumers paid of their credit card balances, suggesting continued use of pandemic savings. This also suggests that consumers want to continue to have credit available for future spending.”

The latest data also revealed a rise from December in the number of credit card accounts with one missed payment (0.7%) and a greater jump in the number of accounts with two missed payments (11.8%).

“Of some concern to lenders – although usually expected after Christmas – is the month-on-month increase in card holders missing payments, in particular those falling two months behind,” the analytics software firm added.

“Whilst the percentage of accounts with two missed payments is lower than January 2021, the impact of pandemic savings this time last year as well as suppressed spending due to the lockdown may have been influential.”

FICO also said its data suggests that credit cardholders with lockdown savings are continuing to use these to pay off credit card balances.

It added: “The question is whether this resilience can be sustained as the cost of living generally and utility and petrol prices in particular continue to escalate. Lenders will need to be vigilant to any further increases in missed payments in the coming months and ensure that they are offering support to customers where it’s needed.”

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