UK credit card balances rise to GBP £1,875, payments fall

FICO's April 2025 data has revealed ongoing financial pressures among UK credit card holders, with spending slightly reduced year-on-year and average balances on the rise.

Spending and balances

The report indicated that credit card spending in April rose by 11.8% compared to March, reaching GBP £825. Despite this seasonal uplift, usually seen after the post-Christmas period, overall spending was still 0.5% lower than in 2024. The average balance per account also increased by 1.5% from the previous month, and by 4.9% year-on-year, settling at an average of GBP £1,875.

The trend of decreasing proportion of balance paid has continued throughout 2025. In April, customers paid on average 33.98% of their balances, 6.2% lower than a year earlier and 0.9% lower than the previous month. If this trend persists, payment rates may fall towards pre-pandemic levels of around 30%.

Payment performance

The picture for April reflects the continued pressure on household finances as overall credit card balances track higher year-on-year and average delinquent balances do the same.

The report found encouraging signs in payment performance. After an increase in missed payments in March, the proportion of customers missing one payment fell by 22.1% to 1.29% in April, which is also 14% lower than the same month last year. The increase seen in March did not translate to higher rates of customers missing two payments in April. The rate of customers missing two payments rose only slightly by 0.2% month-on-month to 0.3% and is 6.6% lower year-on-year. Those missing three payments accounted for 0.2% of customers, 3.3% lower than the previous month and 5.8% lower year-on-year. The data suggests these outcomes indicate effective collection processes.

Despite the fall in the number of missed payments, the average balances on accounts with missed payments continue to climb. For accounts with one missed payment, the average balance increased by 0.2% to GBP £2,325 in April, a 4.9% increase over the year. The average balance for those missing two payments declined by 1.3% compared to March but remains up 6% year-on-year at GBP £2,840. Similarly, for three missed payments, there was a slight 0.2% monthly decrease but a 6.3% increase over the previous year, with an average balance of GBP £3,215.

Cash withdrawals and customer behaviour

The report also noted a resumption in the use of credit cards for cash withdrawals. After falling for seven consecutive months, the proportion of customers withdrawing cash on their credit card increased by 2.8% month-on-month, reaching 2.99% in April. According to the report, this measure is sensitive to seasonal trends and often peaks in the late summer months.

Another area of concern highlighted was the combined effect of lower payments, inflation, and rising balances. The 4.9% increase in average balances year-on-year, paired with a lowering payment rate, indicates continued strain on household budgets.

Lender response

FICO suggested that lenders should closely monitor collections strategies to support customers under financial stress.

"In light of the latest FICO data, lenders will want to continue to review collections strategies, ensuring customers with higher balances at risk are prioritised and receive flexible and tailored treatment. They may also want to focus on those customers using their cards for cash withdrawals, as this can often be an early sign of financial stress,"  the company commented.

The figures in the report are based on aggregated data from UK card issuers, who represent a major share of the domestic market.