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Delinquencies on UK Credit Cards Fall to Two-Year Low

The steady growth in the UK economy is matched by a long-running decline in delinquent card payments. FICO’s latest data from the Benchmark Reporting Service shows that delinquencies reached their lowest point in more than two years.

For example, the snapshot from December 2014 shows that 0.6 percent of accounts were two cycles (60+ days) delinquent, compared to 0.8 percent in December 2013 and 1.0 percent in December 2012. The impact of seasonal spending on key metrics will be available in the next benchmarking report.

UK Cards Chart

For card issuers, this trend provides an opportunity to analyze their data in more depth, and identify the best targeted treatments for specific account segments that are experiencing delinquencies.

Overlimit accounts were also down compared to December 2013, but the average amount overlimit increased by £12.80 in the last year. Average total sales rose £56 over the year from December 2013 to December 2014, driven by a rise among established accounts (open 1 to 5 years) and veteran accounts (open more than five years).

In fact, average spend on veteran accounts rose above £700 per card for the first time since at least 2002.

The card performance figures are part of the data shared with subscribers of the FICO® Benchmark Reporting Service, which compares overall market performance in the UK cards market with individual card issuers’ performance.

We are now launching a new risk benchmarking service that will include a significantly increased set of risk, limit, payment and revenue metrics covering the UK and Irish credit card market. This will include an interactive dashboard that will support deeper portfolio insight. If that kind of data could help you manage your portfolio, get in touch with Stacey West at staceywest@fico.com.

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