Rise in customers missing two credit card payments

New data from FICO has revealed that there was a 13.6 per cent rise in customers missing two credit card payments from December 2022 to January 2023.

The figures also that accounts missing one payment fell by 0.7% in the same period. Average total sales per card down 8 percent compared to December 2022 at £755

Average balance on credit card accounts with two missed payments was 1.9 percent lower month-on-month whilst average balances across all accounts dropped by 0.6 percent month-on-month to £1,650

FICO says that consumer credit behaviour in January 2023 generally following typical seasonal patterns.  However, there was a spike in those customers missing two payments — 13.6 percent month on month — which could ring alarm bells for lenders.

December saw more accounts falling one month behind, and the increase in two missed payments in January appears to be moving the delinquency forwards. With Consumer Duty a priority for the FCA, lenders will want to ensure they are taking the right actions with those customers showing signs of financial difficulty. There may, however, be some comfort in the fact that the average balance of two missed payments continues to decrease and has been dropping since October 2022.

Lenders will also welcome the fact that the number of consumers missing one payment in January dropped month on month; usually in the first month of the new year there is an increase in one-month missed payments. However, this needs to be balanced against the fact that we saw a high increase in one-month missed payments in December, so this is more of a levelling off than a reduction and the percentage is still high. The percentage of payments to balance has also increased by 2.4 percent month-on-month after decreasing from September 2022.

With an increase usually seen in this behaviour post-Christmas this will be an interesting measure to track throughout the year as the cost of living crisis continues.

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