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Choose the Right Credit Card with Rewards

No one wants to get hammered by sneaky interest rate hikes, late charges and other penalties. And you don't have to, says financial guru Suze Orman, who recommends The site lists nearly 1,000 cards, all of them issued by credit unions. "These programs generally don't hit you with the same fees that the big banks do, which is why consumers should check it out," says Orman, author of The Money Class (Spiegel & Grau) and host of her own show on MSNBC. Just enter your zip code, and up pops a list of credit unions in your area; click on any link to go directly to that institution's website. All top-rated cards are guaranteed to have no annual fee, zero balance-transfer fees, and no annual percentage rate increases if you're late on a payment. Other helpful features include the Dean's List (credit unions that have earned the highest, five-star, rating) and the Detention List, which advises consumers which major credit card companies they should steer clear of.

This longtime credit-card evaluator—it's been a leading consumer resource for over a decade—is another of Chatzky's favorites. Choose from among 34 search criteria on the detailed toolbar, and with just one click this site sorts through more than 1,000 cards to single out the very best ones within those parameters, along with an unbiased opinion on each. LowCards also has an A-to-Z index with the current interest rates of every card on the market. You can also use a secure application to apply online for most cards on the site. "It's great for sorting cards by your specific need, whether that's a low introductory interest rate, a business charge card or one with hotel or travel rewards," says Chatzky. "The reviews are very straight-up about the pros and cons, as well as what kind of credit score you need to qualify. They hit all the bases."

Charging Ahead

The days of the good old magnetic stripe may soon be over. Companies are starting to roll out a new generation of high-tech cards, complete with batteries, microprocessors and more. Citibank recently released its 2G bank card, which lets consumers select whether to pay with credit or rewards points with the push of a button. By the end of the year, MasterCard plans to introduce a version that displays your balance on a mini LCD screen—but only after users enter their PIN on a keypad. "You'll have to do a lot more typing with these smart cards, but requiring that info will beef up security," says Avivah Litan, a vice president at Gartner Inc., a tech research firm based in Stamford, Connecticut. But she predicts we'll evolve far beyond that. "In the future even phones will be used as credit cards—just wave it at the cash register and you're good to go."

119: Average number of times a person uses a card each year

20 billion: Number of credit card transactions each year in the US

$88: average transaction

Originally published in the November 1, 2011, issue of Family Circle magazine.