It seems that one positive arising from lockdown was the contraction of outstanding credit card balances up to May of this year.  I must admit I found this to be a rather surprising fact given that headlines focus on a worsening personal debt crisis.  

It does serve as a striking reminder of what the lockdown months of March and April were like for us all.  Whilst many in the country have seen a reduction in income; many of us also saw a drastic reduction in our outgoings given that we suddenly had very little on which to spend our disposable income. 

It is clear now that even if areas are subjected to a further lockdown, it will not be as severe as that which we faced earlier this year.  Individuals may still have a reduced income but they are also able to return to their usual routine (whether that be gym sessions, meals out or even starting to think about attending sports fixtures or theatres with social distancing measures). It is likely that the true impact of the previous few months on consumers will only come to light in the next few months.  Therefore I expect that any figures released for credit card debt to today's date would be somewhat different.  

We await the results of the FCA's Call to Input on ongoing support for consumers. In its Call to Input the FCA discusses how those who applied for a mortgage or consumer credit payment deferral over the last few months may be affected in the coming months.  The acid test will be what decisions consumers make now as outgoings increase and income continues to be uncertain.

It is clear that lenders should be talking to their customers to understand how likely a consumer is to resume payments.   Understanding the financial resilience of its customer base will put a lender in a stronger position to navigate through the next few months.