UK credit card spend dips as missed payments increase

UK credit card spending fell in October ahead of the key Christmas trading period, with new data from FICO indicating lower monthly outlays but continued strain among customers who miss payments.

Average monthly spending per card dropped 4.7% from September and 3% compared with a year earlier, to £765. The pullback marked a shift after several months of rising balances through 2025.

Average active balances decreased by 0.7% on the month to £1,900. Balances remained 4.7% higher than in October 2024, underlining the build-up in borrowing over the past year.

The proportion of the total balance that cardholders repaid fell again. The percentage of balance paid dropped 0.8 percentage points month on month to 34.4%, which was 7.6% lower than in the same month last year.

FICO said recent figures showed a clear seasonal pattern. Spending weakened in October in the run-up to the festive period, after which retailers typically see a surge in card use.

"Seasonal patterns are emerging in the final quarter of 2025, with spending in October declining ahead of the festive season. As a result, average balances showed their first notable monthly decrease since May, although still remain 4.7% higher year-on-year. With the percentage of overall balance paid also decreasing month-on-month and year-on-year, risk teams will be concerned about financial vulnerabilities across the Christmas peak spending period," said FICO.

Missed payments rise

The data showed a mixed picture on arrears. The share of customers missing one payment rose 7.5% compared with September. The proportion missing two payments increased 2.6% on the month. Customers who had missed three payments fell 2.3%.

FICO reported that balances on delinquent accounts remained elevated when compared with last year. The average balance for accounts with one missed payment increased for the third consecutive month.

The company described the pattern of missed payments during 2025 as erratic. It highlighted what it called an ongoing "financial juggle" in UK households, with some borrowers showing strain despite the slight easing in headline balances.

"This concern will be further exacerbated by the erratic pattern of missed payments seen through 2025. In October the percentage of customers missing either one or two payments increased month-on-month, illustrating the impact of the ongoing financial juggle taking place in UK households. Average balances for accounts with missed payments remain elevated compared to last year, with the average balance for one missed payment increasing for the third month in a row," said FICO.

Limits edging higher

Average credit limits increased marginally in the month. They rose 0.2% from September to £5,910 and stood 2.5% above the level a year earlier.

The share of accounts that were over their credit limit fell 6% month on month to 1.35%. That figure remained 3.3% higher than in October 2024, which FICO said still pointed to financial distress within part of the customer base.

The average amount by which customers exceeded their credit limits continued to rise. The average overlimit balance increased to £95. That was up 3.3% on the month and 2.2% compared with a year ago.

FICO noted that fewer overlimit accounts and the first notable fall in active balances since May offered some positive indicators ahead of the Christmas peak. It warned, however, that these improvements did not extend to the more financially stretched segment of cardholders.

Delinquency risk

The firm said the ratio of delinquent balances had grown over recent months. Average balances on accounts with one or three missed payments remained high, even as overall balances dipped slightly.

Payment rates have been trending lower through 2025. FICO said it expected these rates to fall further, which would place more pressure on those already in difficulty.

"The first notable decrease in average active balances since May, combined with fewer overlimit accounts, provides some encouraging signs ahead of the Christmas spending peak. However, as the average balance decreases, the delinquent average balance remains high, resulting in a higher ratio of delinquent balances for the last couple of months for customers missing either one or three payments. Payment rates also continue to trend downwards and are expected to decrease further. Risk teams should therefore prepare for potential seasonal stress by focusing on early intervention strategies, particularly for customers showing signs of payment strain," said FICO.

The figures form part of FICO's regular UK credit card performance data, based on information from issuers that use its TRIAD Customer Manager system. The company said it would continue to track seasonal effects and delinquency trends as lenders move through the Christmas period and into the new year.