Restricting the use of APRs in advertising has resulted in consumers paying an extra £41m in interest charges, according to comparison site uSwitch.com.

The research found that 62% of credit card users don’t understand the difference between the way interest rates are displayed now, as per annum rates, and the APRs that were previously used.

The Department of Trade and Industry introduced the reforms in conjunction with the Office of Fair Trading in May 2005 with the aim of simplifying comparisons, but uSwitch.com says many pay interest charges without even realising it.

Although it tentatively estimates that cash withdrawals add at least £41 million in interest charges to cardholder credit bills, it admits the real figure could be closer to £334m.

Nick White, director of financial services at uSwitch.com, says that with some providers now charging up to the APR equivalent of 31.23% on cash withdrawals, cash rates have become sub-prime rates masquerading as mainstream lending.

He says: “People who use a credit card to withdraw cash may already be struggling under the burden of debt and having to resort to this method of borrowing to make ends meet. They can ill afford to pay the exorbitant rates of interest that most lenders are now charging them.

“While we accept that credit card providers have to make money and that cash withdrawals carry a higher risk of people getting into bad debt, it is indefensible for companies to penalise their most vulnerable customers.”