1. October credit card spending fell 4.7% month-on-month and 3% year-on-year. 2. Average credit card balances decreased by 0.7% but are 4.7% higher than last year. 3. Missed payment categories increased, reflecting financial strain on UK households. 4. Average credit limits rose 0.2%, indicating slight consumer confidence but persistent distress. 5. Risk teams advised to implement early intervention strategies due to payment strain.
FAQ
Why Bearish?
The decline in spending and increased missed payments suggest economic stress, historically linked to lower credit scores and defaults, which could impact FICO's business.
How important is it?
The data indicates worsening credit conditions, which is crucial for FICO's operational focus.
Why Short Term?
Immediate financial pressures may lead to quicker shifts in credit ratings, affecting FICO’s performance short-term, as seen in past economic downturns.
Pre-Christmas spending and average active balances fall, however average balances for missed accounts remain high reflecting continued financial pressure
FICO (NYSE:FICO):
Ahead of the Christmas spending peak, the October 2025 credit card data from global analytics software leader FICO shows a decline in credit card spending compared with the previous month and the previous year. Lower spending led to average balances falling for the first time since May, but balances remain higher than October 2024.
Highlights
- Spending fell 4.7% from September, and 3% year-on-year, to £765
- Average active balances decreased by 0.7% month-on-month to £1,900 although they remain 4.7% higher than the same month in 2024
- The percentage of total balance paid fell by 0.8% month-on-month to 34.4%; 7.6% lower than October 2024
- Month-on-month, the number of missed payments rose for one and two-payment categories (by 7.5% and 2.6% respectively) while three missed payments fell by 2.3%
- The percentage of customers using credit cards to take out cash declined 2.4% month-on-month and was 7.1% year-on-year, continuing a long-term downward trend
FICO Comment:
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.
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.
Average credit limits increased modestly by 0.2% month-on-month to £5,910, remaining 2.5% higher year-on-year. Encouragingly, overlimit accounts decreased by 6.0% on the previous month to 1.35%, though this remains 3.3% higher than last year, suggesting continued financial distress. The average overlimit amount increased to £95, up 3.3% on the previous month and 2.2% since the previous year.
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.
Key Trend Indicators – UK Cards October 2025
Metric |
Amount |
Month-on-Month Change |
Year-on-Year Change |
Average UK Credit Card Spend |
£765 |
-4.7% |
-3% |
Average Card Balance |
£1,900 |
-0.7% |
+4.7% |
Percentage of Payments to Balance |
34.36% |
-0.8% |
-7.6% |
Accounts with One Missed Payment |
1.41% |
+7.5% |
-3.2% |
Accounts with Two Missed Payments |
0.32% |
+2.6% |
+0.6% |
Accounts with Three Missed Payments |
0.2% |
-2.3% |
+2.5% |
Average Credit Limit |
£5,910 |
+0.2 |
+2.5% |
Average Overlimit Spend |
£95 |
+3.3% |
+2.2% |
Cash Sales as a % of Total Sales |
0.88% |
-3.4% |
+0.9% |
Source: FICO
These card performance figures are part of the data shared with subscribers of the FICO® Benchmark Reporting Service. The data sample comes from client reports generated by the FICO® TRIAD® Customer Manager solution in use by some 80% of UK card issuers. For more information on these trends, contact FICO.
About FICO
FICO (NYSE:FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 200 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, insurance, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 80 countries do everything from protecting 4 billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. The FICO® Score, used by 90% of top US lenders, is the standard measure of consumer credit risk in the US and has been made available in over 40 other countries, improving risk management, credit access and transparency. Learn more at www.fico.com.
FICO and TRIAD are registered trademarks of Fair Isaac Corporation in the United States and other countries.
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