August Breaks UK Credit Card Record as Balances Soar
FICO UK Credit Card Market Report suggests risk teams must closely monitor payment rates and overlimit usage as rising inflation adds to financial pressure for consumers
LONDON, October 20, 2026--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.