Chris Warburton’s Post

Some additional UK centric financial news that I found of interest. FICO UK credit card market report: June 2024 The FICO UK Credit Card Market Report for June 2024 reflects the usual seasonal uplift in consumer spending over the summer months. However, the data also suggests that consumers are managing their credit debt effectively. Whilst May 2024 saw quite significant month-on-month increases in late payments, lenders will be encouraged by the fact these have not carried over into June to the same extent. One area of concern is the increasing trend in balances for customers missing three payments. 1. Credit card spending rose 4.2% from May to June 2024, now standing at an average of £840 and 0.1% higher than June 2023. 2. In line with usual seasonal trends, average balances increased by 1.1% in June to £1,800; this is 5.7% higher than June 2023. 3. The percentage of balance paid dropped by 2.3% month-on-month in June to 36.9%, reflecting the increase in spend and overall balance. It is also 2.7% lower year-on-year, although the pattern of lower payments to balance seen in the early part of 2024 has steadied. 4. After rising quite significantly from April to May (8.3%), the number of cardholders who missed one payment fell by 6.5% from May to June. 5. The average balance for cardholders missing one payment has remained higher year-on-year for two years, and was £2,235 in June. 6. Although there was an increase in May in the number of customers missing one payment, this has not rolled into seeing higher numbers in June missing two payments. In fact, for the second month in a row there has been a decrease in customers missing two payments. 7. June also saw a significant drop in customers missing three payments; however, this is still 2% higher year-on-year. 8. The use of credit cards to take out cash has continued to increase, following the typical summer trend. At 3.45%, it is 3.4% higher month-on-month. Selected text is © www.business-money.com, 2024. All Rights Reserved. Graphic is © Mark S. Mandula, CLO BCR Learning, 2024. All Rights Reserved.

Over the last decade, the average credit card annual percentage rate (APR) has nearly doubled. Today, the Consumer Financial Protection Bureau released an analysis finding that interest rate margins are at an all-time high, costing consumers an extra $25 billion each year. The CFPB is working to ensure that families and businesses can obtain competitive rates on credit cards, rather than getting stuck in products with high rates and junk fees. https://lnkd.in/eeXnMKax

The average APR on credit cards reached 22.8% in 2023, according to a report from the Consumer Financial Protection Bureau This figure is the highest level recorded since the Federal Reserve began collecting this data in 1994. Over the last 10 years, the average APR on credit cards has almost doubled, standing at 12.9% in late 2013. Interest rates have been rising consistently over that time frame, but that’s only a small part of the equation. Equally important is the fact that the APR margin—the difference between the average APR and the prime rate—has reached an all-time high. Read more: https://ow.ly/cNVv50QISM4 #payments #creditcards #APR #interestrates

Cards. It's not just the rate, its the rewards. But it's not just big banks, its smaller banks and credit unions as well. This has long been a debate on the desk, where is the value? Is it a lower rate but fewer perks? Someone has to pay for the perks (guess what, it's you). However, a good reminder to shop around in this higher rate environment. Also, the credit card issuers - not sure having the CFPB say "found high levels of concentration and evidence of practices that imply anti-competitive behavior in the consumer credit card market." "In its newly-updated "Terms of Credit Card Plans" survey, the CFPB found "the 25 largest credit card issuers charged customers interest rates of 8 to 10 points higher than small- and medium-sized banks and credit unions. This difference can translate to $400 to $500 in additional annual interest for the average cardholder." "CFPB Director Rohit Chopra said, "Our analysis found that the largest credit card companies are charging substantially higher interest rates than smaller banks and credit unions. With over $1 trillion in credit card debt outstanding, the CFPB will be accelerating its efforts to ensure that consumers can access better rates that can save families billions of dollars per year." #banks #rates #creditunions #creditcards #credit https://lnkd.in/ee94V5bU

UK credit card holders are showing an erratic pattern of spending and payments, according to FICO's UK Credit Card Market Report for July/August 2023. The report highlights several trends that could cause concern for lenders in the coming months. Read more below.

Exciting news for credit card users, RBI's new guidelines to empower consumers Users now have the flexibility to tailor the following according to their needs: 1. Billing cycle to align with payment receivables. 2. Choice of card network (Rupay/Visa/Mastercard/American Express, etc.) based on Interest and benefits (cashback and offers). ThanksThe Economic Times to cover our thought on latest RBI guideline, read more: https://shorturl.at/aesRS

Credit card rule change: Can you change credit card billing cycle, due date multiple times now? What RBI new guidelines say https://lnkd.in/gi7HKBGf Download Economic Times App to stay updated with Business News - https://lnkd.in/geZXhCXX

CFPB finalizing rule to lower credit card late fees to $8 for large issuers (issuers with 1MM+ open accounts) - reported $14B in late fees represents about 1.1% of industry revenue. While designed to save consumers money, the impact will be uneven as savvy issuers look for new revenue streams to offset the lost revenue - potentially higher interest rates, introduction of annual fees, higher cash advance fees, etc. Sub-prime and private label card issuers probably most impacted given strong reliance on late fees to make the economics work. #creditcards #banking

According to the newly released J.D. Power 2024 U.S. Credit Card Satisfaction Study, just 46% of cardholders are now classified as financially healthy and 51% carry revolving debt on their cards. Meanwhile, the average recalled interest rate on new purchases has climbed to 15.6%, creating a tenuous environment for cardholders and card issuers, J.D. Power reported. #creditcards #merchantservices #cardacceptance #JDPower #financiallyhealthy

A recent analysis of debit trends found that active cardholders made an average of 34.6 debit transactions per month last year. The study highlighted a 4% year-over-year increase in both the number of debit transactions and the dollar volume associated with them. According to the report from Discover Financial Services-owned PULSE, the majority of debit payments occurred at the point of sale. On average, consumers conducted 30.7 point-of-sale transactions, two account-to-account transfers, and nearly two ATM transactions per month in 2023. Read more: https://ow.ly/tVxE50SUUrq #payments #debit #paymentmethods #debitcards #Pulse