What Are the Best Credit Cards to Use?

Americans charge nearly $2 trillion a year on their credit cards, but many consumers are not getting the best deal they could. A recent survey revealed what people think of their credit cards and the institutions that issue them.

Although credit cards have become near-necessities, people need to pick carefully. A card that is right for one person might not be for another. Choosing the wrong card can add up to high interest rates and extra fees and create a lot aggravation for the consumer.

Citibank spends $220 million a year on advertising, more than any of the other top five credit-card issuers. Its commercials claim its cards are "Rewarding. Very, very, very rewarding!"

But if you want a reward card, check your spending habits to make sure the card is worth it. Reward cards usually carry an annual fee and tend to have higher interest rates – not good for those who carry a balance from month to month.

If you carry a balance, a low interest rate is the most important consideration for you.

If you pay off your balance every month, interest rates are not much of a concern, so look for a card with a low or no annual fee.

Consumer Reports found that all card issuers are not equal. A survey of 36,000 readers reported the most complaints about cards issued by the biggest banks. Citibank, Chase, Bank of America, Capital One and HSBC were unimpressive in the survey.

"Compared with those of better-rated companies, customers of these banks complained more about late fees, unexpected interest-rate hikes and poor customer support," Rosalind Tordesillas, of Consumer Reports, said.

People said they were much happier with cards issued by credit unions. USAA Federal Savings, which is open to people in the military, veterans and their families, topped the list.

"Two of the higher-rated credit-card issuers were credit unions," Tordesillas said. "Their median interest rates were 10 and 11 percent. Compare that with 17 percent for two banks among those at the bottom of our ratings."

Credit unions are also better at resolving problems, the Consumer Reports survey revealed.

Many credit unions have started allowing relatives to join, and some have much more open membership policies than they used to.

Consumer Reports' bottom line: Using a credit card you are happy with can save you a lot of hassles, and add up to a lot of savings over time.