Ahead of the Christmas spending peak, the October 2025 credit card data from global analytics software leader FICO showed a decline in credit card spending in the UK compared with the previous month and the previous year. Lower spending led to average balances falling for the first time since May, but balances remain higher than October 2024.
Highlights
- Spending fell 4.7% from September, and 3% year-on-year, to £765;
- Average active balances decreased by 0.7% month-on-month to £1,900 although they remain 4.7% higher than the same month in 2024;
- The percentage of total balance paid fell by 0.8% month-on-month to 34.4%; 7.6% lower than October 2024;
- Month-on-month, the number of missed payments rose for one and two-payment categories (by 7.5% and 2.6% respectively) while three missed payments fell by 2.3%; and
- The percentage of customers using credit cards to take out cash declined 2.4% month-on-month and was 7.1% year-on-year, continuing a long-term downward trend.
“Seasonal patterns are emerging in the final quarter of 2025, with spending in October declining ahead of the festive season,” FICO said in a statement. “As a result, average balances showed their first notable monthly decrease since May, although still remain 4.7% higher year-on-year. With the percentage of overall balance paid also decreasing month-on-month and year-on-year, risk teams will be concerned about financial vulnerabilities across the Christmas peak spending period.
“This concern will be further exacerbated by the erratic pattern of missed payments seen through 2025. In October the percentage of customers missing either one or two payments increased month-on-month, illustrating the impact of the ongoing financial juggle taking place in UK households. Average balances for accounts with missed payments remain elevated compared to last year, with the average balance for one missed payment increasing for the third month in a row.”
Average credit limits increased modestly by 0.2% month-on-month to £5,910, remaining 2.5% higher year-on-year. Encouragingly, overlimit accounts decreased by 6.0% on the previous month to 1.35%, though this remains 3.3% higher than last year, suggesting continued financial distress. The average overlimit amount increased to £95, up 3.3% on the previous month and 2.2% since the previous year.
“The first notable decrease in average active balances since May, combined with fewer overlimit accounts, provides some encouraging signs ahead of the Christmas spending peak,” FICO added. “However, as the average balance decreases, the delinquent average balance remains high, resulting in a higher ratio of delinquent balances for the last couple of months for customers missing either one or three payments.
“Payment rates also continue to trend downwards and are expected to decrease further. Risk teams should therefore prepare for potential seasonal stress by focusing on early intervention strategies, particularly for customers showing signs of payment strain.”
