UK credit card balances hit record high amid strain

UK credit card balances returned to a record high in April, according to FICO's latest market report, which also showed higher spending and lower repayments.

Average active balances rose 1.3% from the previous month to £1,950, matching the peak last seen in December 2025. Spending increased 10% month on month to an average of £815, which FICO linked to typical Easter behaviour.

The data also pointed to mounting pressure on household finances. The proportion of overall balances repaid fell 1.4% month on month to 32.6%, a third straight monthly decline that brought it closer to the pre-pandemic average of 30%.

Missed payments worsened across several categories. The percentage of customers missing two payments rose 1.9% from March and 16.3% from a year earlier, while the share missing three payments increased 6.2% month on month and 17.3% year on year.

The three-missed-payment category was the weakest in annual terms across the delinquency measures covered in the report. Balances on accounts with missed payments were higher across all delinquency categories than in the same month last year.

Accounts with one missed payment showed a small monthly improvement after a spike in March, but remained 4.9% higher than a year earlier. Customers missing a payment for the first time were also carrying larger debts, with the average balance on those accounts up 6.7% year on year to £2,480.

Average balances also rose for more serious arrears. Accounts with two missed payments carried an average balance of £2,855, up 0.5% on the year, while those with three missed payments reached £3,325, up 3.4%.

Affordability strain

Another sign of pressure came from overlimit borrowing. The number of accounts exceeding their credit limit rose 14.1% month on month and 4.6% year on year.

Average overlimit spending stood at £95. That was down 5.9% from March, but still 5.5% above the level recorded a year earlier.

The April figures suggest consumers were adding to debt even as payment behaviour weakened. That contrasts with improvements seen during 2025 in the share of customers missing payments.

Banks and card issuers are likely to watch the findings closely as they assess signs of financial stress among borrowers. While spending increased in April, the monthly growth was not enough to move above 2025 levels, suggesting the uplift may have been seasonal rather than a sign of stronger finances.

The report draws on data shared with subscribers to FICO's Benchmark Reporting Service. The sample comes from client reports generated by the company's TRIAD Customer Manager system, which is used by about 80% of UK card issuers, according to FICO.

In its assessment, FICO pointed to a combination of persistent inflation and volatility in global energy prices as factors weighing on household budgets. It said the rise in spending, combined with weaker repayment rates, had pushed more customers into arrears and above their credit limits.

That leaves lenders facing a more difficult consumer credit picture after a period in which some indicators had improved. April's rise in balances and deterioration in later-stage missed payments suggest pressure is becoming more entrenched among some cardholders, especially those already carrying larger debts.

FICO said: "April 2026 presents a mixed but broadly concerning picture for lenders. With consumer spending rising, but repayments falling, more customers have fallen into arrears and gone over their credit limit. The monthly growth in spending does not go far enough to rise above 2025 levels, suggesting that any improvements are likely to be seasonal rather than a sign of stronger financial health. And with average balances now matching the record high from December 2025, it is clear that consumers are carrying more debt in 2026."