Credit card spending declines in September

Despite this, spending levels remain significantly higher than during the same month last year, up by 4.1% when compared to September 2022. Meanwhile, the average credit card balance remained relatively stable compared to August at £1,735 but continued the longer-term upward trend with a year-on-year increase of 8.6%.  

Meanwhile, and after peaking at 42% in May, the percentage of payments to balance has been on a downward trend and currently stands at 38% – this follows up-and-down movements since a two-year low in April 2023.  

By contrast, year-on-year the percentage of customers missing one, two and three payments have continued to rise – with those missing two payments 9.3% higher than in 2022 and those missing three payments 17.8%.  
Cash use has also continued its upward trend – rising by 1.6% month-on-month and 4.3% year-on-year in September.  

FICO said: “Following a yo-yo summer of consumer spending and credit card management, September 2023 saw the average spend on credit cards fall slightly, albeit it remains higher than the previous year.  

“With the festive season approaching and advertisers ramping up their spending push, it’s likely spending will rise in November and December, although the question will be how much, given the other well-documented financial pressures consumers are facing. 

“Driven by the increase in spending, there has been a slight monthly increase in average credit card balances. There has also been an increase in the number of customers missing payments, illustrating that the ongoing economic volatility continues to impact consumer spending.  

“Inflationary pressures and a weak economic outlook mean average balances are likely to continue an upward trend, remaining higher than last year for some months to come. 

“The month-on-month picture for missed credit card payments is still volatile. There was a decrease in missed payments in August, but September brought a 13.5% increase in accounts missing one payment.  

“The number of accounts missing two payments remained relatively stable in September, continuing a new flat trend we have seen since July 2023, following steady increases from May 2022. For those customers missing two payments, the average balance has marginally decreased by 0.6% month-on-month at £2,605, but this has been trending upwards over the last few months. 

“The continuing economic turbulence, high cost of goods and energy bills as well as the approaching festive season are set to sustain pressure on consumer finances. The steady increase in customers using their credit cards to withdraw cash that we have witnessed since March this year continued in September, with a month-on-month increase of 1.6% and an annual increase of 4.3%.

“This trend is another signal of financial struggle and should act as an important warning sign to lenders.”