Banks can expect a tough time from MPs

The chief executives of Lloyds TSB, HBOS and Capital One will be quizzed as to progress on making credit card charges more transparent and fairer.

MPs on the Treasury select committee are expected to say that progress has been made, but that more still needs to be done.

The banks may also be criticised over lending too much money to consumers.

Reforms

The hearing is the latest stage of the committee's enquiry into the credit card industry.

Last December, the committee set out its plans to make credit cards fairer.

The committee issued a report which called for the planned Consumer Credit Act to include legislation imposing a single method for calculating annual percentage rates (APRs).

It is an easy strike to lay UK indebtedness solely at the door of the providers Jemma Smith, Apacs

At the time, MPs said that lack of transparency over charges allowed some credit and store card providers to get away with charging exorbitant interest - often seven or eight times the Bank of England base rate.

In addition, the committee called for the urgent inclusion of summary boxes in all customer account statements and credit agreements.

Summary boxes would outline terms and conditions in plain English, and would state the length of time it would take to pay off debt if borrowers made just the required minimum repayment.

In February, John McFall MP, head of the committee accused credit card providers of dragging their feet over reforms aimed at benefiting consumers.

Tough time

The Association of Payment Clearing Services (Apacs), which represents card companies, said the industry had made great strides in meeting the committee's requests.

"There has been significant progress to improve transparency and competitiveness in the card market," Apacs spokeswoman Jemma Smith said.

"Summary boxes and a single method of calculating APRs have been adopted as has greater sharing of data between providers."

"It is an easy strike to lay UK indebtedness solely at the door of the providers," she added.

"The number of people caught out by debt is still a small percentage and ultimately it is a question of personal responsibility."

Storm

When the committee questioned banking chiefs last year, Barclays boss Matt Barrett provoked a storm when he said that he did not use credit cards supplied by his own subsidiary, Barclaycard, because they were too expensive.

He revealed that he also advised his four children to avoid using credit cards.

Mr Barrett was lambasted for 'doing a Ratner' - a reference to 1980s jewellery entrepreneur Gerald Ratner, who famously described one of his own products as "crap."