With so many different credit cards out there, it can be a real challenge choosing the right card for your unique situation. Keeping these general guidelines in mind can help you make sure your credit cards are working for you. The two most important factors in choosing credit cards wisely are your knowledge of the terms upon which any card is offered to you and your knowledge of your own habits and patterns of use.

What constitutes the best card or cards for you depends entirely on how you use your credit.

• Do I typically carry a balance or do I pay my bills in full each month?
• Do I use my credit cards only every once in a while, regularly but sparingly, or frequently--even for small purchases--instead of carrying cash or checks?
• Do I need a separate card for business expenses?
• Which of the various features and benefits different cards offer are most important to me?
• Is there a charity or institution I would like to support through my choice of credit cards?
• Is there a rebate or miles program that would be of particular benefit for me?

With credit, as with clothing, people are often tempted to choose the item that fits their ideal of how they would like to use credit rather than how they actually do. But to find the right match for your own credit use, you need to realistically assess your own habits and patterns.

If you tend to carry a balance, for example, you will want to look for cards with low interest rates. If you know you will be carrying that balance for some time, it makes sense to choose a card that guarantees a fixed low interest rate, even if there is an annual fee.

If you are more likely to pay your balance in full most of the time, the interest rate a card charges may be of less concern to you than the benefits it offers. Extra warranty protection may be very important to a person who frequently uses a credit card to purchase valuable electronics or computer equipment, while someone else who travels often might value the traveler's accident insurance another card offers.

Similarly, an auto rebate might be very appealing to an individual saving to purchase a new car, whereas airline miles would be the rebate of choice for the globetrotter looking to squeeze in one more trip this year. If these rebate programs are likely to give you a return that is truly valuable for you, then it is probably worth signing up, even though these cards often require an annual fee.

The increasing number of "affinity" cards available make it possible to support charities, universities, and other organizations--even cities, when San Francisco's affinity card program begins in the near future--with your credit card purchases. Often, the issuers of these cards make a donation to the organization every time you make a purchase with the card, while by using it you get to show everyone who sees it something you care about.

Once you have identified what you really want and need in a card, it is time to start paying attention to the specific terms for each card you have or are offered. There's no one right card for everybody, so you need to make sure that you've chosen the one that fits you.

Make sure you read carefully, and read any notices you receive of changes to your agreement. The important thing is to be sure that you understand how the card works and what you can expect as a credit-active consumer using that card.

• What is the interest rate, and is it fixed or variable? If it is a special low-interest offer, how long will the low rate apply, and to what kind of transactions?
• How is interest calculated? Some card agreements base interest on the average daily balance from the past cycle, while others use a two-cycle method and base interest on purchases from the past two months.
• Is there a grace period before interest is charged? If so, how long is it?
• What is the annual fee, if any?
• What other fees may be imposed, and under what circumstances? Many card issuers are charging higher late and over-the-limit fees than in the past, to encourage their customers to be more responsible about their credit accounts. If you're occasionally absentminded, a card with great interest rates but high fees might not be cost-effective for you.
• What special features or programs does this card offer? Will you be taking advantage of them?

The trick is to find the card with the features and costs that fit your use patterns. By carefully reading the terms of each credit card agreement, you can ensure that the card or cards you've chosen for your credit needs will serve you well and in a cost-effective manner.

Like the rest of your personal finances, your credit activity is unique. With literally hundreds of credit cards available, you can undoubtedly find the right fit for you.