The credit card industry has rejected claims by Which? that it is rife with underhand practices and hidden charges.A spokesperson for the Association of Payment Clearing Services (APACS), Sandra Quinn, said Which?’s comments are out of date.Speaking yesterday she denied that credit card firms are levying unfair charges against consumers. “Late payment charges and over limit fees are to compensate the banks for the costs that they incur in those fees in charging customers,” Ms Quinn said.Richard Mason, director of price comparison website moneysupermarket.com, added: “Many of the providers’ ‘bad practices’ are slowly being dealt with by the industry.”But he conceded some of Which?’s underlying points.”

As the market for personal loans and credit cards has become increasingly competitive and robust in recent years with many lenders battling for market share, more low-rate deals for the consumer have been on offer than ever before. “The downside of this has been that providers have tried to claw-back profits through other avenues instead - such as expensive payment protection insurance and hidden charges.”According to Which? the credit card industry makes around £427 million a year from charging consumers who pay late or go over their credit limit.

The consumer watchdog also estimated that the personal loan industry makes £1 billion a year from selling payment protection insurance.Ms Quinn countered charges made by Which? that the credit card industry was profiteering from theses charges, by saying card providers were not “making any profit out of” the charges.

A leading high street bank has issued debt and credit card advice to help consumers manage their personal finance during the Christmas period - and beyond. The Co-operative Bank is offering consumers suggestions designed to help them avoid a festive financial hangover.

Short-term advice consists of not letting debt build up during the Christmas period - it won’t go away by simply forgetting about it. The Co-op also advises that consumers could benefit from checking out consolidation loans as a way of getting a better debt management deal. If consumers have problems in controlling their credit cards - hide them - that way there is no chance of adding to debts that may already exist.Long-term financial solutions are also important; the Co-op states that by working out a budget consumers can accurately assess their income and expenditure.

Sheila Macdonald, chief operating officer at the Co-operative Bank, said: “People often make resolutions at this time of year, and it is the perfect time to make some serious decisions about your financial future.”Taking simple steps, like transferring to a credit card provider that offers a cheaper borrowing rate than your existing provider will save you money if you don’t pay off your balance every month.”