A novel apparatus has been developed in which atoms in a magneto-optical trap are used as targets in ion-atom collision experiments. The apparatus is an extension of earlier methodology in which the momentum of the recoiling target is measured and used to deduce the collision Q value and projectile scattering angle. In the present work, the low temperature of the target atoms yields increased momentum resolution, which in turn leads to improved Q value and scattering angle resolution. In addition, because the trapping process leaves some fraction of the atoms in an excited state, the new methodology is ideal for the study of collisions with excited targets. The prototypical system presented is low energy charge transfer between singly charged alkali ions and trapped rubidium atoms in the ground and first excited state.