LONDON—November 24, 2011—FICO (NYSE:FICO), the leading provider of analytics and decision management technology, today released data showing that most UK cardholders are paying less of their outstanding credit card balance than at any point in the last two years. The latest data from the FICO™ Benchmark Reporting Service showed that this decline in payment-to-balance ratios took place among “classic” card accounts established within the last five years. Classic cards exclude student cards, premium cards and cards issued in Ireland, which are all tracked separately.
Similarly, FICO’s latest monthly snapshot also revealed that the number of classic cardholders taking cash advances from their credit cards is the highest for the last two years, while cash usage is down somewhat for student and Irish cards. Average credit lines on classic cards continue a steady decline, and are down 4.3 percent since March.
“The combination of flat spending on classic cards with lower payment percentages and higher cash usage indicates increasing strain on consumers’ wallets,” said Mike Gordon, FICO vice president and managing director for Europe, the Middle East and Africa. “While one month is not enough to call a trend, we are monitoring these and other patterns closely to help our clients manage their card portfolios and understand changes in the UK consumer’s financial health.”
The 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. The data sample studied represents 26 million accounts, or about half of all credit cards issued in the UK, and comes from client reports generated by the FICO™ TRIAD® Customer Manager solution in use by most UK card issuers.
Card issuers that subscribe to the FICO Benchmark Reporting Service receive a quarterly review of their portfolio vs. the industry, with 24 months’ worth of data. For greater insight, subscribers can drill into the data by vintage of accounts.
Source: FICO Benchmark Reporting Service.
FICO (NYSE:FICO), formerly known as Fair Isaac, delivers superior predictive analytics solutions that drive smarter decisions. The company’s groundbreaking use of mathematics to predict consumer behavior has transformed entire industries and revolutionized the way risk is managed and products are marketed. FICO’s innovative solutions include the industry-leading solutions for measuring credit risk, managing credit accounts, identifying and minimizing the impact of fraud, and customizing consumer offers with pinpoint accuracy. Most of the world’s top banks, as well as leading insurers, retailers, pharmaceutical companies and government agencies, rely on FICO solutions to accelerate growth, control risk, boost profits and meet regulatory and competitive demands. FICO: Make every decision count™.
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Except for historical information contained herein, the statements contained in this news release that relate to FICO or its business are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the success of the Company’s Decision Management strategy and reengineering plan, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, its ability to recruit and retain key technical and managerial personnel, competition, regulatory changes applicable to the use of consumer credit and other data, the failure to realize the anticipated benefits of any acquisitions, continuing material adverse developments in global economic conditions, and other risks described from time to time in FICO’s SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2010 and its last quarterly report on Form 10-Q for the period ended June 30, 2011. If any of these risks or uncertainties materializes, FICO’s results could differ materially from its expectations. FICO disclaims any intent or obligation to update these forward-looking statements.
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