Credit card spending jumps in December

This is a 6.8% increase on November, reaching the highest level since FICO records began in 2006 with the ongoing impact of continued inflation could dent consumer affordability through 2025.  

Additionally, average credit card balances reached an all-time high in December at £1,860 – with the typical seasonal pressures seeing a three percent month-on-month decrease in the percentage of balance paid in November, and a further 0.5% drop in December.  

If these seasonal patterns continue, FICO suggests the balance paid is expected to rise in January as consumers focus on paying off Christmas spending.  

Meanwhile, of those missing one, two or three payments, the average balance increased year-on-year in November and December – another indicator of the financial pressures faced throughout 2024.  

Broken down, the average balances for one missed payment are now £2,255, for two payments £2,780 and for three payments £3,190.  

The report went on to say: “The usual seasonal trend sees a reduction in customers missing one payment in the run-up to Christmas, as people want to keep lines of credit open.  

“However, in December 2024 there was a 9.3% increase compared to November. And after four consecutive decreases in the percentage of customers missing three payments, there was a 1.2% increase in November month-on-month and a further 2.2% increase in December.  

“As indebted customers struggle with payments in the new year, this trend is expected to continue in early 2025. 

“Given the continued financial pressures affecting households, risk managers should review both limit management and collections contact strategies in order to help customers avoid getting into long-term debt.”

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