Dr Ros Altmann, a former Downing Street pensions adviser, believes there should be an inquiry into the profit margins of credit card companies.
Dr Altmann, who is a former academic and independent expert on pensions policy and retirement, believes there might be a case for a regulator to oversee the rates they charge.
Last week, research by financial advice website, Moneyfacts, revealed that millions of credit card holders could face severe debts after card providers have put interest rates up to a 12-year high.
The Bank of England’s base rate has been at the record low rate of 0.5% for almost a year but despite this, average credit card interest rates have risen to over 18% - the highest level since 1998.
According to many experts, providers are passing on the cost of a rise in defaults - reflected by the squeeze on British households due to rising unemployment.
The Government recently announced proposals to crackdown on credit card companies in an attempt to tackle consumer debt.
However, Dr Altmann concludes that credit card rates cannot be justified and is calling for an investigation into how the industry works.
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