August Breaks UK Credit Card Record as Balances Soar

LONDON--(BUSINESS WIRE)--According to data analysis from global analytics software leader FICO (NYSE: FICO), average active UK credit card balances exceeded £2,000 in August for the first time since records began, following three consecutive months of increases. Contributing to higher balances, payment rates dropped after a brief recovery in July, and remain lower than the same time last year. This trend, coupled with an annual increase in all levels of missed payments, highlights the importance of risk teams continuing to closely monitor for signs of financial difficulty.

Highlights

• Average spending increased by 3.1% month-on-month to £840, growing 3.3% year-on-year and marking the highest annual growth rate in over a year.
• The average active balance grew 1.2% month-on-month to a record £2,005 and remains up 4.8% year-on-year.
• The percentage of overall balance paid fell 1.1% on the previous month, to 33.3%, and is down 3.1% year-on-year.
• Average credit limits crossed £6,000 for the first time, and overlimit accounts grew 4.7% month-on-month to an average overlimit of £95. This is down -3.1% on the previous month but up 3.3% year-on-year.
• The percentage of customers missing one payment fell by 7.1% month-on-month but balances for these accounts rose 5.1% year-on-year, to £2,520.
• Accounts with two missed payments climbed 2.8% compared to July, but are 9.5% higher year-on-year. Annual growth for balances of these accounts slowed to 1.8%, with the average standing at £2,945.
• There was a slight monthly decline of 0.7% in three missed payments, but year-on-year there was a sharp increase of 16.4%. Average balances grew 1.7% on the year, reaching £3,320.

FICO Comment:

August marked significant milestones, as average active balances passed £2,000 and credit limits exceeded £6,000 for the first time. The year-on-year shortfall in payment rates narrowed for a third consecutive month, while overlimit accounts showed year-on-year improvement. This suggests that acute affordability pressures from earlier in the year are beginning to ease slightly, despite the persistent pressure on finances that has characterised the market since early 2025. However, late payments across all three cycles remain higher than in 2025, reflecting a macroeconomic environment that continues to stretch household budgets.

UK CPI inflation rose to 3.1% in August, up from 2.9% in July, driven in part by rising food prices. With Ofgem’s energy price cap set to increase, borrowing costs are unlikely to fall significantly before winter. Meanwhile, total UK credit card debt has reached a record £82.4 billion according to the Bank of England, alongside record-high representative credit card interest rates.

Given these cost pressures, risk teams should monitor whether the recent stability in payment rates and overlimit accounts can be sustained. Although one-cycle delinquency fell sharply in August, it remains 5.1% higher year-on-year. As the primary entry point to the delinquency pipeline, and with CPI and energy costs both rising into autumn, early intervention and tailored support for this population should be prioritised before further seasonal pressure builds.

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.

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