Bradford MP Gerry Sutcliffe today threatened to take tough action against credit and store card companies who target homeless young people.

Mr Sutcliffe, the Consumer Minister, said it was "irresponsible" for firms to offer cards with extremely high interest rates to vulnerable people.

And he fired a warning shot across the companies' bows by promising to refer them to the Financial Services Authority, Britain's top economic watchdog, if they continued to "act inappropriately".

He spoke out after he held a meeting with Centrepoint, one of Britain's biggest homelessness charities.

It said that credit and store card companies, some of whom charge interest rates of 30 per cent, were sending marketing mailshots to 19 homeless hostels across the country.

Mr Sutcliffe, who is steering the Consumer Credit Bill through Parliament, said: "This goes to the very heart of responsible lending.

"We need companies to act appropriately through self-regulation about how they market products to people.

"If not, we will not hesitate to take action."

A spokesman for Centrepoint, which deals with 1,500 rough sleepers a year, said there were no problems with homeless young people using lower interest credit cards.

But it was imperative to clamp down on firms who tried to press high interest cards on people with no home, especially as many suffered mental illnesses or had drug and alcohol problems.

Charity chiefs also hit out at companies which increased credit limits automatically without letting their customers know.

The spokesman said: "If they have got a chaotic lifestyle, people will not realise they have been given a bigger limit and will keep spending until their debt is unmanageable."

Anthony Lawton, Centrepoint chief executive, said: "Nearly a third of homeless young people surveyed admit to suffering from stress, illness and depression due to their debts, many believe they are prevented from a better future because they owe money they cannot repay.

"It is clear that products should not be promoted to young people who lenders know to be living in hostels, or who they know to be homeless.

"At a time when rising debt levels are causing concern for society, it is important that these vulnerable young people are adequately protected and supported."