The credit card con committee

UK customers could have saved some £2 billion last year if they had switched cards

If you've ever wondered why credit card companies have increased your credit limit without asking, included unexpected charges in your latest bill, or if you've ever been credit-scored and lost, this Committee inquiry is for you.

Last week MPs on the Treasury Committee interviewed Barclaycard, Nationwide and the industry body the Association for Payment Clearing Services (Apacs).

BBC Parliament brings you the full broadcast, which forms part of the Treasury Committee's investigation into the credit card industry.

The inquiry is taking place as consumer groups express growing concern about consumer debt, and the committee's focus on hidden charges and high interest rates suggests that it considers these to be key factors.

But industry spokespeople took a different view. They argued fundamentals such as divorce or redundancy are the real factors behind consumer debt.

Treasury Committee member Angela Eagle criticised Barclaycard for charging interest rates of up to 24.9% at a time when the Bank of England base rate is so low - now at just 3.5%.

Barclaycard Chairman Gary Hoffman's defence was that some 50% of Barclays customers pay no interest because they tend to pay off their outstanding credit each month.

Committee members and industry spokespeople did agree on the issue of transparency of information.

Both Apacs, Nationwide and Barclays support the idea of introducing an honesty box, or consumer box in credit card literature.

A consumer box would list and explain the various charges credit card companies have up until recently only detailed in the small print, which most of us tend to overlook.

And they also agreed that the method of calculating APR (Annual Percentage Rate) charges varies from company to company and should have an industry-wide standard.

Consumers are apparently too bamboozled by interest rate calculations and charges that they fail to take advantage of competitive alternatives.

The Consumers' Association has estimated that UK customers could have saved some £2 billion last year if they had switched to another card service.

MPs will next turn their attention to the store card phenomenon. On Monday, House of Fraser and Arcadia will explain their position in the market.

Store cards charge some of the highest rates in the industry - as high as 29% APR.

BBC Parliament will broadcast the second part of the Treasury Committee's investigations - with evidence from GE Capita Bank and the Arcadia group - on Sunday 20 July at 1800 BST.