Credit card companies are "deceitful and misleading", allowing thousands of consumers to take on dangerously large amounts of debt, according to a damning report into the industry by MPs.
The Treasury Select Committee called for wide-ranging changes to the practices of banks and other credit card providers, including publishing a fact box showing the true cost of repayments so that consumers can for the first time compare different cards.
"Consumers are getting a bad deal from a complex and opaque industry," said John McFall, chairman of the cross-party committee of MPs.
The group, which opened its investigation into the credit card market in the summer, pointed to examples of pet dogs receiving marketing material for new cards as well as recovering drug addicts who had previously used their plastic to fund their habit.
"People are bombarded with material and they are given the impression it is easy to get credit, at a time when personal bankruptcies are at a 10-year high," Mr McFall added.
The report, called Credit Card Charges, is particularly damning about store cards. The MPs said it was not uncommon for these products to have interest rates as high as 30 per cent, or eight times the Bank of England's base rate
Bank executives have suffered a series of public grillings by the MPs over their credit cards terms and conditions. Barclays attracted particular criticism after its chief executive, Matt Barrett, admitted at one hearing that he never borrowed on credit cards because it was "too expensive".
The major banks have agreed to include the new fact box on monthly statements from next April.
The committee also criticised the Office of Fair Trading and Department of Trade and Industry for not doing enough to standardise the way the annual percentage rate (APR) is calculated to allow individuals to compare different cards.
Mike Naylor, senior researcher at the Consumers' Association, said: "We hope the verdict will force the industry and regulators to drive out the underhand practices used to hoodwink its customers."Reuse content