Banks, building societies and credit card companies have been issued with a "super complaint" over interest charges and now face another inquiry from the Office of Fair Trading (OFT) in a new blow to the industry.
Consumer watchdog Which?, which has lodged the special complaint with the regulator, warned that the way in which credit card companies work out how much interest to charge customers "cannot be trusted".
It is the latest regulatory blow to hit the financial services industry. Last week, the OFT launched a full-blown inquiry into bank charges on current accounts. The European Commission is also investigating the fees that credit card companies such as Visa Europe charge retailers on transactions.
Which? has accused the UK's top 20 card operators of using 12 different methods to calculate the annual percentage rate (APR), making it impossible for people to compare card costs.
The special complaint is a little-used power granted by the Government to select consumer bodies to force the regulator to examine their concerns.
"Two people who have two different credit cards with the same APR, and who use their credit card in the same way, could be paying very different levels of interest," said Alena Kozakova, principal economist at Which?. Research supporting its complaint shows that half of card users believe comparing the APR is the best way to tell which card is cheapest. "We are calling on the OFT to standardise interest-calculation methods so that consumers can compare like for like," Ms Kozakova said.
Other than the interest rate, credit card providers regularly include complex, often ill-explained calculations that affect the overall APR. These include a "start of interest charge" - where interest begins to be levied from the date a purchase is made instead of from when that purchase is actually registered to the card account.
In a complaint example, a credit card user spends and repays in exactly the same way on four cards. While an HSBC card with an APR of 15.9 costs him a year's interest of £58, a rival American Express Nectar credit card with a lower APR of 12.9 sets him back more - £68.
Which? wants all credit cards to carry an unconditional "interest-free" period on new purchases, and interest calculation to be more transparent. The last time a supercomplaint was lodged with the OFT - on payment protection insurance (PPI) in September 2005 - it led to a full-blown investigation by the Competition Commission (CC) that still continues.
The British Bankers' Association admitted there were "a lot of [different issues] for banks to absorb - and it's not easy to do so when they're coming at you from left, right and centre".
A spokesman for Barclaycard, Britain's biggest credit card provider with more than eight million customers, said the cash differences between the different APRs were "small".