Ask yourself whether you intend to pay off your credit card balance in full each and every month?

If your answer is "No" (and it will be for many cardholders), then the single most important factor to consider is the interest rate. Go for card that offers permanently low standard interest rates.

If your answer is "Yes", then perks and add-ons are what you should be after - whatever suits your taste. If you use a reward program choose a card that offers good points. However, never ignore the interest rate on your card, because you never know what the future holds.

Credit Card Selection Guide

1. Interest Rates

Many cards now have introductory 0% offers on balance transfers. Conversely, some cards will give you 0% on your purchases for an initial period.

The general rule is: if you only have 0% on balance transfers, don't spend a single cent on your card. Otherwise, you'll rack up interest on your purchases at standard interest rates, while all your repayments go towards paying off your 0% debt. Result: a whole new heap of interest-bearing debt.

2. Interest-free Period

You can enjoy between 44 and 55 days' interest-free credit on most cards. If you buy something just after one monthly statement is produced, it will appear on your next statement. Depending on which card you have, you then have between 14 and 28 days to pay off your bill in full in order to avoid paying any interest. Hence, it's worth holding off making big purchases until just after your monthly statement is produced, in order to benefit from the maximum interest-free period.

3. Annual Fees

Annual fees on credit cards are still around unlike many other countries who have banished them to the past. Try to avoid paying a high annual fee where you can because you don't get much for your money despite the marketing from the credit card issuers.

4. Cash Withdrawals

Drawing out cash on a credit card is a complete no-no. Firstly, you start paying interest at high standard rates from the time that you withdraw your cash until every last penny of your bill is paid off, including interest. Secondly, credit-card issuers can charge hefty fees if you use your card to withdraw cash at a cash machine or over the counter. Expect to pay a charge of around $2 per withdrawal. Hence, making lots of small cash withdrawals on a credit card is hugely expensive, so stick to your bank card!

5. Foreign Currency

If you use your card abroad, expect to pay a 'currency conversion fee' of, typically, 2.75% of the value of each transaction. In other words, with most credit cards, goods costing the equivalent of $100 will cost you $102.75. Then again, a small number of credit cards may not levy this fee. So, if you're planning to flex your plastic abroad, make sure that you check out the small print, and your alternatives, in advance.

6. Reward Schemes

Reward schemes, offering things such as Air Miles, points or cash back, are gaining in popularity. Research suggests that these are one of the main factors - after interest rates - that we consider when deciding which card to have.

7. Insurance

Several major credit-card issuers offer free insurance on goods bought using their card. Investigate the deals available at the time.

Price protection: if you buy something that is later reduced in a sale (or you find it cheaper elsewhere), you can claim back the difference, within a specified time period.

Purchase protection: if you buy something on your card that is lost, damaged or stolen at a later date, you can reclaim some or all of the cost from the card company. This can be useful extra cover for fragile or high-value goods.

Travel accident insurance: this pays out lump-sum benefits if you are killed or seriously injured while traveling in transport paid for on your card. As there is no medical or baggage cover, don't confuse this with full travel insurance.

Online fraud guarantees and Internet delivery protection: stops you from being liable for any fraudulent spending on your account while 'distance shopping' via mail, telephone or the Web.

Some card issuers charge extra for these policies but, on the whole, they are only worth having if they come free of charge. And, of course, there are lots of restrictions in the small print, so make sure that you know what you're getting!

8. Gold and Platinum Cards

These days, Gold and Platinum cards no longer have the social standing they once offered. Indeed, someone earning $50,000 a year is eligible to apply for most of these 'precious metal' cards. Still, some do offer enhanced benefits to cardholders - sometime in return for a fee - so you need to weigh up the cost against the likely benefits, based on your spending pattern.

9. Cash back

For every dollar you spend on the card (generally excluding balance transfers and cash advances) you will get a certain proportion of that spend back in cash. For example, for every $100 you spend on your card you may get 1% i.e. $1 back in cash.