UK credit card balances steady as payment rates fall

UK credit card balances were stable in February, while payment rates fell, according to FICO. The data also showed higher balances on accounts with missed payments than a year earlier.

Spending rose 5.1% month on month to an average of £790, reflecting the usual rebound after January's post-Christmas slowdown. Average active balances were unchanged at £1,940, although they were 4.5% higher than in February 2025.

The share of total balances repaid fell 1.53% from the previous month to 33.4%. That was 4.3% lower than a year earlier, though the decline was narrower than in recent months, when annual falls had been running between 6% and 7%.

Missed-payment trends were mixed. The number of customers missing one payment fell 12% from the previous month, while those missing two payments dropped 8.9%.

However, the proportion missing three payments rose 2% month on month and 8% year on year, pointing to continued strain among borrowers already in difficulty. Compared with the same month last year, fewer customers missed one payment, but more missed two and three, extending a pattern seen since the second half of 2025.

Balances tied to missed payments rose across every category, both month on month and year on year. They remained well above 2025 levels, suggesting customers who have fallen behind are carrying larger debts than a year ago.

Affordability pressure

The figures suggest that while some broad measures of card use are stabilising, affordability pressures have not eased for many households. Structural financial strain remains despite a pause in the year-on-year decline in spending seen since early 2025.

FICO also warned that higher energy prices could add pressure in the months ahead, particularly as seasonal spending typically rises through spring. It said lenders' risk teams should closely monitor borrowers with stretched finances.

Credit limits were flat on the month at £5,940 and 2.4% higher than a year earlier. Overlimit accounts fell 3.7% from the previous month, but were still 6.5% above February 2025 levels.

The average amount by which customers exceeded their limit rose 2.1% month on month to £95, and was 5.5% higher than a year earlier.

Seasonal pattern

February is typically a month when spending recovers after January and repayment rates begin to soften before falling further into April. The latest figures broadly followed that seasonal pattern, but also pointed to more severe underlying borrower stress than in previous years.

FICO's benchmark figures are drawn from client reports generated by its TRIAD Customer Manager system, used by around 80% of UK card issuers. That gives the dataset broad coverage of the domestic credit card market.

For lenders, the combination of stable balances, lower repayment rates and larger debts among delinquent customers is likely to sharpen the focus on early intervention. Pre-delinquency action and tailored collections strategies are especially important for higher-balance accounts, FICO said.

The latest numbers suggest a divide in the market between customers still managing seasonal swings in spending and those whose financial position is worsening as debts accumulate. "While February saw month-on-month improvements for accounts missing one and two payments, there was a 2% increase in accounts missing three payments, underlining the challenge for individuals already facing financial difficulties," FICO said.