Nationwide Building Society has hit back at criticism over its decision to raise credit card interest rates, insisting that the move is necessary due to rising costs of providing financial services.

Nationwide, which serves 17 million members across the UK, will increase rates on five major credit cards in April, with some rising by as much as 50%.

Customers on lower-rate deals will see their interest jump from 9.9% to 14.9%, while typical rates will climb from 15.9% to 20.9%. New applicants could face rates as high as 24.9%.

Critics have accused Nationwide of "rampant profiteering," especially as the Bank of England has recently reduced the base rate from 4.75% to 4.5%. City analysts predict further cuts could bring the base rate down to 4% by the end of the year.

However, Nationwide insists that it is not immune to economic pressures and must act to cover the growing costs of maintaining credit card services.

A spokesperson for the building society said: "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."

The society also stressed that vulnerable customers would not be impacted: "We will not apply increases to those in or near financial difficulty, or those who have been in debt for a long period."

In a letter to members, Nationwide explained that the five-percentage-point increase would add just 42p to the monthly cost of a £100 balance if not repaid in full.

While Nationwide defends its decision, others in the industry are moving in the opposite direction. Lloyds Bank, for instance, says its credit card rates "are almost entirely base rate linked, so have gone down, broadly, following the latest Bank of England decision".

Financial expert Rachel Springall from noted that some banks are even improving their offers, such as Barclaycard's new 0% purchase deal lasting 23 months.

James Sherwin-Smith, managing partner at Sortcode Capital and a vocal critic of Nationwide's recent £2.9 billion takeover of Virgin Money, argues that the move contradicts the principles of a mutual organisation.

James said: "Nationwide is widening its profit margins at a time of stress for many of its members, perhaps giving cover to banks to do the same. It is rampant profiteering and I cannot see how they can justify this move."

Speaking to : "Long-standing Nationwide cardholders face higher rates. Mutuality should mean lower prices, but instead, members are getting the same treatment as customers of a profit-maximising bank."