FICO’s UK credit card data for July 2026 shows the average active balance rising 0.4% to £1,980. That is a record high for the second consecutive month and 4.7% above a year earlier. Average monthly spending fell 2% to £815 over the same month. FICO (NYSE: FICO) draws the figures from client reports generated by its TRIAD Customer Manager platform. Some 80% of UK card issuers use it.

Balances climbing while spending eases is the headline pairing, but the spending half needs care. July spending usually dips after June, and FICO called the same drop a year ago seasonal. Year on year, spending is up 1.8%. The stronger evidence that debt is being carried rather than repaid is the repayment rate. It sits at 33.6%, against 34.9% last July.

The Arrears Picture Is Deteriorating Unevenly

Accounts missing one payment rose 11.5% month on month and 9.1% year on year, with average balances on those accounts flat at £2,495. Two missed payments rose 0.7% month on month but sit 11% higher than a year earlier. The average balance on those accounts slipped 0.7% to £2,930. Three missed payments rose 9.6% month on month and 16% year on year, with balances on those accounts up 1.5% to £3,310.

The share of balances repaid recovered 0.9% month on month to 33.6%. That sounds like relief until you note it remains below last year. Average credit limits edged up to £5,995, and the number of overlimit accounts fell 3.4% month on month.

FICO’s own reading is that affordability pressure is real but that the escalation has changed shape. More customers are entering arrears, while those already deep in delinquency are not seeing balances compound as fast as before. Year-on-year balance growth moderated for two- and three-cycle accounts, and overlimit accounts ran close to flat on the year.

That distinction is worth holding onto. It suggests collections teams are getting somewhere with the back book while the front of the funnel keeps filling up behind them.

The BNPL Rules Are the Variable to Watch

The FCA’s regulation of buy now pay later took effect on July 15, 2026. It requires firms to run an affordability assessment before extending credit. FICO’s point is straightforward. Some customers who would previously have been approved for BNPL will now be declined. If they hold a card, that spending moves onto the card instead.

FICO expects only modest upward pressure on balances from that shift. If it happens at any scale, though, the record balances in this data are a floor rather than a peak. It would also mean some card balance growth over the coming quarters is regulatory displacement rather than fresh consumer demand. That matters for anyone reading the series as an economic indicator.

The regulation was designed to stop unaffordable lending. Whether it stops the borrowing or relocates it to a more expensive product is an open question. The card data is where the answer will appear first. We covered the underlying direction of travel in analysis of Affirm’s return to the Australian BNPL market. The broader shift in how consumers pay over time makes the card series the place to watch.

Spending on Essentials Is the Uncomfortable Part

FICO cites separate StepChange research finding that roughly eight million UK adults describe keeping up with card repayments as a large monthly burden. Around five million have used a credit card to pay for essentials such as food, energy or fuel.

Set that against a record average balance and payment rates below last year, and the picture is not one of discretionary borrowing. A sizeable group of cardholders is using revolving credit as income substitution. That population does not respond to pricing signals in the way credit risk models generally assume. For these borrowers, the alternative to borrowing is not deferring a purchase. The pressure sits inside a wider regional credit expansion that makes it easy to misread.

What the FICO Report Means for Risk Teams

FICO recommends early intervention on the growing one-cycle population and closer monitoring of balance patterns at three cycles. That is sound and also fairly standard.

The more pointed implication is about calibration. Affordability assessments built on pre-July 2026 behavior will not capture a cardholder whose BNPL access has just been withdrawn. The card book will show a spending increase with no corresponding change in income or existing obligations. Issuers who do not adjust for that will read displaced BNPL demand as improving engagement. The mistake surfaces two or three cycles later as arrears.

The same scoring question runs through the debate over FICO Score 10T’s approval for FHA mortgage lending. Trended data of the kind 10T uses is meant to show which way a borrower’s balances are moving, not just where they stand.

What to Watch

The single most informative figure in the next two editions of this series will be the one-cycle missed payment rate. If it keeps climbing at double-digit monthly rates while spending stays soft, the affordability problem is broadening rather than concentrating.

The second thing to watch is spending, measured year on year rather than month on month, since the series moves with the seasons. Look for card spending that outpaces last year through the autumn without any improvement in consumer confidence or real income. That would be the clearest evidence that the BNPL rules pushed borrowing onto cards rather than removing it. The FICO July release sets the baseline for that comparison.

Fintechbits covers UK consumer credit, payments regulation and credit risk. Nothing here constitutes financial or investment advice. All analysis represents the editorial views of Fintechbits.