Nationwide increasing credit card interest rate by 50%

Olenna

ManyWays said:

Anyone seeing a large increase in their rates who has a balance has the option to decline the increase, stay on the old rate and continue to may the balance off monthly This stops you using the card, but if you are trying to clear it this is a no-brainer, and it doesnt harm your credit score.

We don't typically have a FICO credit score yet in the 51st state.

Most of these cardholders will be paying in full every month (i.e. not very profitable) so putting the APR up will be an attempt to get some profit out of their accounts. 

PRAISETHESUN

MABLE said:

Just had a letter from Nationwide bs advising my rate is increasing from 15.9 to 20.9%.  Not a problem as I clear balance every month.  However my other providers have recently advised me of interest reductions.

Had the same letter, but it came a week after I had contacted them to close my credit card for an unrelated reason. Found it quite amusing, especially as you say when other providers are cutting rates.

grumpy_codger

ThisIsMoney: Nationwide accused of 'rampant profiteering' as it hikes credit card rates by up to 50%

Nationwide responded: ‘We are not immune from the increased cost of providing and maintaining credit cards and we do need to increase some of our lower interest rates. Our average APR will remain significantly below the market average. ... 'We will not apply increases to those in or near financial difficulty, or those who have been in debt for a long period.’

So, it looks like less risky customers subsidise more risky ones...

Olenna

grumpy_codger said:

ThisIsMoney: Nationwide accused of 'rampant profiteering' as it hikes credit card rates by up to 50%

Nationwide responded: ‘We are not immune from the increased cost of providing and maintaining credit cards and we do need to increase some of our lower interest rates. Our average APR will remain significantly below the market average. ... 'We will not apply increases to those in or near financial difficulty, or those who have been in debt for a long period.’

So, it looks like less risky customers subsidise more risky ones...

No, it's someone reading the Daily Fail and not doing actual analysis.
They're shockingly moving their legacy credit cards to same level (or below) their current APR (24.9%).

grumpy_codger

Olenna said:

grumpy_codger said:

ThisIsMoney: Nationwide accused of 'rampant profiteering' as it hikes credit card rates by up to 50%

Nationwide responded: ‘We are not immune from the increased cost of providing and maintaining credit cards and we do need to increase some of our lower interest rates. Our average APR will remain significantly below the market average. ... 'We will not apply increases to those in or near financial difficulty, or those who have been in debt for a long period.’

So, it looks like less risky customers subsidise more risky ones...

No, it's someone reading the Daily Fail..

What does this have to do with 'Daily Fail'?

The accusation came from some "James Sherwin-Smith, managing partner of Sortcode Capital, who represented members during the takeover".

And the response was directly from Nationwide.

If they are "moving their legacy credit cards to same level", why do they not do this for all customers?

WillPS

James Sherwin-Smith, it should be noted, is seeking election to the board of Nationwide. He was previously associated with the failed petition demanding a vote for members on the Virgin Money deal, and is clearly following the same playbook feeding tabloids non-stories which they lazily reproduce without fact checking.

He didn't "represent members during the takeover" at all.

I believe they are registered here - at least a member with the same name as their previous X username registered, chatted a lot about the petition but then stopped replying when the petition reached its 'cheque on a piece of string' crescendo. 

MABLE

MABLE said:

Just had a letter from Nationwide bs advising my rate is increasing from 15.9 to 20.9%.  Not a problem as I clear balance every month.  However my other providers have recently advised me of interest reductions.

Even though they increased the apr and see they have now offered me a promo rate for 18 months at 0 percent and 2.4 percent fee. So perhaps I am not considered so risky after all.

BTW the apr is not an issue because I clear the balance each month.

Olenna

MABLE said:

MABLE said:

Just had a letter from Nationwide bs advising my rate is increasing from 15.9 to 20.9%.  Not a problem as I clear balance every month.  However my other providers have recently advised me of interest reductions.

Even though they increased the apr and see they have now offered me a promo rate for 18 months at 0 percent and 2.4 percent fee. So perhaps I am not considered so risky after all.

BTW the apr is not an issue because I clear the balance each month.

APR increases are not always to do with risk; it can be an attempt to increase profitability or to align with the market.
Actual risky customers will have their card limit reduced to limit possible losses.