Credit card spending hit record high in December

In total, accounts that missed one payment jumped month-on-month by 19%. As for those to have missed two payments, this increased by 19% year-on-year while those to have missed three payments went up by 20% when compared to December 2021.  

The pattern of falling payments to balance also continued in the final month of 2022, with a two percent month-on-month drop and a four percent year-on-year decrease.  

Additionally, while retail sales volumes were widely reported as being down in December, the data analytics company’s figures show the highest average total credit card spending since its UK risk benchmarking records began in 2006.  

Looking at the figures in more detail, average total sales increased by nine percent when compared to November to £825, while average balances rose by five percent month-on-month to £1,660.  

Responding to these findings as a whole, FICO believes it will particularly concern financial institution as the focus on the Consumer Duty heightens, adding that those who face this increase in late payments will benefit from using optimised strategies to determine who and when to contact, as well as omnichannel communications to ensure those messages land.

 
Alongside this, those with the ability to incorporate digital-first communications will be in a much stronger position to deploy effective collections strategies.