The percentage of UK credit card accounts with two missed payments jumped by 13.6% in January compared to December 2022, new data published by FICO has indicated.
FICO’s credit card analysis also revealed that the average total sales per card was down 8% compared to December, at £755.
The software analytics firm said its data on UK card trends in January showed that many consumers missing one credit card payment in December continued to struggle with their debts in the new year, with a marked increased in two missed payments.
However, the balances for accounts two missed payments dropped, with the average balance on these 1.9% lower month-on-month, which FICO said could potentially reflect curtailed spending.
FICO’s figures also showed that average balances across all accounts dropped by 0.6% month-on-month, to stand at £1,650 in January.
“December saw more accounts falling one month behind, and the increase in two missed payments in January appears to be moving the delinquency forwards,” a FICO statement said.
“With Consumer Duty a priority for the FCA, lenders will want to ensure they are taking the right actions with those customers showing signs of financial difficulty. There may, however, be some comfort in the fact that the average balance of two missed payments continues to decrease and has been dropping since October 2022.”
FICO also suggested that lenders will welcome the fact that the number of consumers missing one payment in January dropped month-on-month, having stated in the first month of the new year there is usually an increase in one-month missed payments.
“This needs to be balanced against the fact that we saw a high increase in one-month missed payments in December, so this is more of a levelling off than a reduction and the percentage is still high,” the firm added. “The percentage of payments to balance has also increased by 2.4% month-on-month after decreasing from September 2022.
“With an increase usually seen in this behaviour post-Christmas this will be an interesting measure to track throughout the year as the cost of living crisis continues.”
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