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Nationwide set to increase credit card interest rates by up to 50% in weeks

Journalist: Katie Elliott, Daily Express

ended 26. February 2025

We're looking for experts to respond to the news that Nationwide is set to hike interest rates on credit cards by up to 50% in a matter of weeks. 

Keen to also include any tips for people who may be worried. 

"From 1 April 2025, Nationwide will be increasing the representative rate for existing credit card customers by up to five percentage points. Nationwide’s maximum APR for new and existing customers, which is lower than the market average, will be kept at its current rate of 24.9% APR.

“No increase will be applied to accounts of customers in financial difficulty, including those in the later stages (30+ months) of persistent debt and those with an existing APR of 24.9%. Customers will be given the option of opting out of the rate increase, but their card will be frozen for new transactions, meaning they can continue to pay down any existing debt at their old rate.”

Those facing the steepest increase of the full five percentage points could see their purchase interest rates jump by up to 50%. Some customers will only face a smaller rise of one percentage point.

4 responses from the Newspage community

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Editor
Jamie Elvin
Director at Strive Mortgages
Nationwide’s decision to raise credit card interest rates by up to 50% will come as a blow to many borrowers already struggling with the rising cost of living. While the building society has stated that those in financial difficulty will be exempt, many households could still see their debt become significantly more expensive overnight. With the Bank of England holding interest rates higher for longer, lenders are adjusting their pricing, but such a sharp increase raises concerns about affordability. Borrowers should review their options carefully—those who can opt out of the rise should weigh the benefits of keeping their existing rate against the loss of access to new spending. For others, switching to a lower-rate product or a 0% balance transfer card could help manage costs. At a time when household budgets remain stretched, this move highlights the importance of staying on top of borrowing costs and ensuring debt remains manageable.
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Justin Moy
Managing Director at EHF Mortgages
I presume you mean 5% and not 50%?

This is not necessarily the rate paid by clients, each credit card provider has to issue a maximum APR payable, but the suggested maximum rate and borrower may pay. This 24.9% APR is in line with the likes of Barclaycard who have the same example APR, so this is not excessive, more about aliment in the market. The actual pricing for any borrower will be down to a formal credit check and continual assessment of account conduct. As always it is worth shopping around for a balance transfer to another provider, many 0% options are still out there.
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Editor
Dariusz Karpowicz
Director at Albion Financial Advice
The timing couldn't be worse for Nationwide customers facing credit card interest rate increases of up to 50%. With inflation still pinching pockets and energy prices climbing, this April 2025 change adds another financial hurdle for those already juggling debt.
If you've received a notice letter, remember you have options. Those in financial difficulty will be exempt, and you can opt out of the increase (though your card will be frozen for new purchases). For others, this might be the perfect moment to consider balance transfer offers, consolidation loans with lower rates, or creating a payment plan to clear balances before the new rates kick in.
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Steve Humphrey
Adviser & Founder at The Mortgage Pod
With the cost of living already putting pressure on households, any increase in borrowing costs is unwelcome. This change is a reminder that rising borrowing costs can have a real impact on everyday finances, not only mortgages.