The OFT’s survey, based on a sample of 1,890 customers, found that, while 60 per cent of respondents claimed to have decent knowledge of credit cards, over three quarters did not know what Annual Percentage Rate applied to their own card.

The research findings have informed the OFT’s response to government proposals for reform of consumer credit legislation, especially on how to improve the clarity and transparency of information.

John Vickers, OFT chairman, said: “Consumers need key information presented in a way that is easy to understand to make good choices about credit cards. Our research provides consumer evidence on how to do this.”

Meanwhile, in their response today to criticism from the Commons Treasury Committee, the Department of Trade and Industry will announce that changes to simplify credit card borrowing will begin in October this year.