Nationwide Building Society is set to impose a major hike on credit card interest rates, with some customers facing an increase of up to 50% within weeks.
From 1 April, existing credit card holders will see their representative rate jump by up to five percentage points, affecting those with Member, Select, Nationwide, Gold, and Classic credit cards. While the maximum APR for new and existing customers will remain at 24.9%, this hike means thousands could be paying significantly more on their outstanding balances.
While Nationwide has assured that interest rates will still be below the market average, the move comes at a time when household budgets are already stretched due to rising food costs, energy bills, and mortgage rates. Customers can choose to opt out of the increase, but their cards will be frozen for new transactions.
A Nationwide spokesperson said: "Despite these changes, our interest rates will still be below the market average. We will not be applying increases for those in and near financial difficulty or who have been in debt for a long period."
Impact on Grocery Spending
With many consumers relying on credit cards for day-to-day essentials, particularly in supermarkets, the rate hike could have a direct impact on household grocery budgets.
Tighter Spending – Shoppers already facing food inflation may cut back on premium items and opt for budget-friendly alternatives, which could see discount supermarkets like Aldi and Lidl gain market share.
Reduced Credit Reliance – Those who can no longer afford to carry a balance on their credit card may switch to buy now, pay later (BNPL) services or rely more heavily on overdrafts, which often have even higher interest rates.
Supermarket Loyalty Schemes in Focus – Shoppers may turn to loyalty programmes like Tesco Clubcard or Sainsbury’s Nectar to maximise savings. More consumers may also use cashback credit cards that offer rewards on food shopping.
This increase from one of the UK’s largest mutual lenders signals a growing trend of higher credit costs, meaning consumers will have to rethink how they finance everyday essentials, including their weekly shop.
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