UK credit card severe delinquency rises, FICO says

FICO reported a rise in severe UK credit card delinquency in its latest market data for May, despite a post-Easter fall in spending and a rise in repayment rates.

Its analysis found that the share of accounts with three missed payments rose 17.1% from a year earlier, pointing to deeper stress among borrowers already in difficulty. At the same time, spending and repayments followed a pattern often seen after Easter, with card use easing after a seasonal peak.

Average spending on UK credit cards fell 3.0% month on month to £790. Compared with a year earlier, spending was broadly unchanged, marking a shift from the declines seen through much of 2025.

Active balances also edged lower in May, slipping 0.3% from the previous month to £1,945. Even so, they remained 4.3% above a year earlier, indicating that debt levels across card portfolios are still elevated.

The proportion of overall balances repaid increased 4.7% from the previous month. However, at 34.1%, the repayment rate was still 4.1% lower than the level recorded in 2025.

Mixed arrears

The arrears picture was uneven across different stages of missed payments. May brought an improvement in accounts with two missed payments, but that was offset by continued deterioration in accounts with one and three missed payments.

All three delinquency categories remained above the levels seen a year earlier. Both the number of accounts and the balances attached to them were higher than in May 2025 for customers with one, two and three missed payments.

Overlimit accounts, which had risen sharply in April, fell back in May. They declined 5.7% on the month to 1.3%, although that figure was still 1.6% higher than a year earlier.

FICO's analysis also suggested that average delinquent balances were not rising as quickly as balances across the wider card market. Accounts with one missed payment recorded a 0.5% year-on-year increase in average balance, accounts with two missed payments were broadly flat, and accounts with three missed payments showed a 3.1% fall.

That suggests customers in the most severe delinquency group held proportionally lower balances than the overall portfolio did a year ago. Even so, the rise in the number of customers reaching three missed payments points to growing financial strain among more vulnerable borrowers.

Seasonal pattern

The May figures followed what FICO described as a typical post-Easter shift in card activity. Spending fell after the holiday period, while payment rates rose as customers worked through balances built up earlier in the spring.

That seasonal easing did not remove broader pressure in the market. Balances have stayed structurally high through 2025 and into 2026, even when monthly movements have been modest.

FICO also warned that spending could pick up again over the summer, partly because of higher fuel prices. That may increase pressure on households already struggling to keep up with card repayments.

Issuer coverage

The figures form part of the data available through FICO's Benchmark Reporting Service. The sample is drawn from client reports produced by the FICO TRIAD Customer Manager system, used by about 80% of UK card issuers.

The breadth of that sample gives the data weight as an indicator of conditions across the market, particularly at a time when lenders are watching for signs that consumer finances are weakening after a long period of high living costs and elevated borrowing.

In its commentary, FICO urged lenders to pay close attention to borrowers before they slip further into arrears. "However, with the significant year-on-year increase in accounts with three missed payments, and the likelihood of increased spending over the summer months, risk teams should maintain heightened monitoring of delinquency progression and ensure that pre-delinquency intervention strategies are designed to address the higher balance levels now characteristic of customers in financial difficulty," FICO said.