Monthly credit card spending reaches highest level since 2006

Despite this headline increase, the up-and-down pattern of missed payments, as well as the balance on those accounts missing payments, suggest savings are continuing to play their part. Broken down, the percentage of payments to balance dropped by 3.7% to 38%, while the average balances went up by £1,705 or 1.7% month-on-month.  

Additionally, while there was a drop in the number of customers missing one payment decreased by 6.6%, accounts rolling forwards from one to two missed payments have been steadily increasing – going up by 7.6% between May and June, with this also being 26.6% higher year-on-year.  

Alongside this data, FICO also review the one, two and three missed payment balance when compared to the overall current balance. In all three of these cases, in the last few months this ratio has been flat – which, according to the credit ratings agency, indicates missed payment balances are not increasing at a faster rate than the overall current balance.  

It also suggests issuers have robust risk management strategies in place and give limited increase offers to customers who are not going to subsequently miss payments.

Meanwhile, cardholders who have their card for between one and five years continue to have the highest percentage of missed payments – likely to be impacted by introductory rates such as balance transfer offers ending. As such, FICO say lenders will need to proactively support this group in the months leading up to these rates coming to an end.