Nationwide Building Society has announced upcoming increases to interest rates on several of its credit cards, impacting thousands of customers. The adjustments, set to take effect in April, will see rates rise by up to 5% for certain cardholders, potentially increasing borrowing costs significantly.
The changes will apply to five major credit cards: Member, Select, Nationwide, Gold, and Classic. While some customers will face only minor increases, others could see their purchase interest rates surge by as much as 50%, according to The Sun. However, those who pay off their balance in full each month will not be affected.
Interest Rate Increases and Potential Impact on Customers
The most substantial rate increase will be 5%, which could lead to a 50% rise in purchase interest rates for some cardholders. For example, this would result in an additional 42p per month in interest for every £100 left unpaid on a balance. Others will see a more modest 1% increase, adding approximately 9p per £100 owed each month.
These changes come at a time when many households are already managing increased financial pressures. Customers who do not clear their full balance each month will be most affected, particularly those who carry outstanding debts over longer periods.
Additionally, fees for balance transfers and cash withdrawals will also rise, though the extent of these changes will depend on individual customer circumstances. Nationwide has assured that cardholders in financial difficulty or long-term debt will not be subject to these rate hikes.
Nationwide Justifies the Move Amid Rising Costs
Nationwide, which serves 17 million customers in the UK, defended the decision, citing increased costs in providing and maintaining credit card services. A spokesperson for the building society stated:
“In recent years, the cost of providing and maintaining credit cards has risen. We are not immune from this, and we do need to increase some of our lower interest rates, while holding our maximum rate at an APR of 24.9%.”
Despite the upcoming increases, Nationwide claims its rates will still remain below the market average. The building society also emphasised that the changes are necessary to sustain its credit services while ensuring that it continues to offer competitive financial products.
Customers concerned about the impact of these changes are encouraged to review their repayment strategies. Ensuring that at least the minimum repayment is met each month will help avoid additional charges and potential damage to credit scores.
Those looking to mitigate costs may also consider alternative balance transfer options or consult financial advisers for tailored support.
