Nationwide issues £835 'repayment' warning to millions of customers

Nationwide has warned over a "spike" in debt with the spend on repayments rising by 25 per cent last month. The building society, which is the UK's biggest, also says the number of transactions for debt repayment jumped 14 per cent in the same period.

Customers repaid unsecured debts of £735 million in April – a 25 per cent year-on-year rise, while the number of transactions to debt repayment increased by 14 per cent. On average those with a credit card are repaying £391 per month, while repayments to car finance are £267 and personal loans £195 - £835 in total.

Nationwide’s Spending Report – an analysis of more than 225 million debit card, credit card and Direct Debit transactions – shows an eye-watering £7.5 billion was spent overall in April. Spending overall was up two per cent compared to the previous year, while transactions were up one per cent.

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Mark Nalder, Nationwide’s Payments Strategy Director, said: “Many households have turned to credit as a way of dealing with rising prices. While some are using it to spread the cost of luxury items, such as holidays, others are relying on credit to help pay essential bills. However, a 25 per cent rise in credit repayments should be looked at in the round.

"As much as some people will be relying more on their credit cards and loans at this time, a notable fall in essential costs such as energy bills and supermarket spend means others will be using the opportunity to repay more debt while they can.

"We would encourage anyone struggling with debt or worried about their finances to get in touch as we offer a range of tailored support for those facing financial difficulties.”

It also found a sharp rise in housing costs partially offset by falls in spending on utilities and supermarket shopping and spending on catalogues increased 12 per cent as Brits look to spread the cost of purchases.