MPs criticised providers of store cards and credit cards yesterday for "outrageous" interest rates and hidden charges.

The Treasury select committee, which is investigating the sector, heard evidence from consumer groups.

"These [cards] are outrageously ripping off consumers," one committee member said.

Forum Response: British Retail Consortium

A spokesman for the British Retail Consortium told ePolitix.com: "Stores do not set the interest rates on the cards they provide. Retailers offer store cards as an additional customer service and it is for the customer to decide whether they want to take advantage of any particular package offered to them.

"To criticise retailers for providing choice is not only patronising to consumers but shows a complete ignorance of the balance of power between stores and their customers.

"As with everything else in retail, the consumer's ability to choose to buy or not to buy is the ultimate power."

Forum Response: APACS

A spokesman for the Association of Payment Clearance Services said: "Interest rates are a competitive issue, not an industry issue. There are a whole range of products out there, some which charge nothing and some which charge a lot. It's a competitive marketplace."

Forum Response: Consumers' Association

A spokeswoman for the Consumers' Association told ePolitix.com: "The Treasury select committee asked us to present evidence about transparency in credit cards. Our written and verbal evidence focused on how interest is calculated and the lack of transparency in calculations which can mean consumers find it hard to really compare cards or work out how much they will be charged.

"We also discussed the problems associated with risk based pricing and credit referencing - highlighting that credit checks can be detrimental to your credit scoring and mean that you may only be offered a card with a higher APR.

"We also supported the idea of an honesty box on monthly statements highlighting key information such as credit charges.

"We called on the committee to press the industry for quick action on the honesty box and to standardise certain elements of how interest is calculated."

Forum Response: National Consumers Council

A spokesperson for the NCC said: "There has been an explosion of marketing materials for credit cards. They are often aimed indiscriminately by dropping them through the letter-boxes of students and people already in debt.

"These advertising leaflets can be misleading as they often give prominence to low annual percentage rates (APR) for introductory periods and on transfer of debts and other cards which can be very confusing for people.

"Research shows that people want more and better presented information before they are asked to sign up. The survey also highlights the need for better consumer education within some social and age groups.

"The NCC wants credit card companies to start using an Honesty Box, similar to one which already operates in the US. This simple table which appears on all promotional materials gives people clear, step-by-step information on what the different interest charges are, as well as telling them about late payment charges, introductory benefits, details of interest-free periods and annual fees.

"Nationwide have already taken the lead with their single table of key features and now its high time all other banks and building societies follow suit."