Credit card companies have come under fire from consumer group Which? for continuing to apply unnecessary costs to customers.

Credit card companies have come under fire from consumer group Which? for continuing to apply unnecessary costs to customers.

Which? claims that credit card firms make £400 million a year from late payment or exceeded credit limit charges.

The watchdog service also believes that loan issuers earn at least one billion pounds per year from selling extortionate payment protection insurance.

Malcolm Coles, editor of Which? said: "Lenders seem to have no qualms about persuading people to take on more debt than they can afford and they'll carry on doing it as long as they can get away with it."

He added that the organisation would continue to push for changes to be made through the Consumer Credit Act.

The standardisation of interest calculation can also contribute to consumer confusion, as it can vary between providers.