Choose credit cards by how you use them

— -- Americans have a complicated relationship with credit cards. Most of us won't leave home without them. But ask the average consumer how she feels about credit card companies, and you're likely to hear the kinds of words you can't say on prime-time TV without getting into trouble with the Federal Communications Commission.

A recent survey by J.D. Power and Associates found that credit cards have the lowest customer satisfaction level of all financial services. On a 1,000-point scale, card companies received an average satisfaction rating of 658.

Credit card issuers lagged behind mortgage servicers (798), online brokerage firms (773) and retail banks (763) on the satisfaction scale.

Those results will come as no surprise to anyone who's ever been smacked with an unexpected late fee or interest-rate hike.

Still, choosing the card that best suits your borrowing habits can improve your credit card experience, says Jeff Taylor, senior director of banking practice for J.D. Power.

The J.D. Power study divides credit card users into two categories:

•Transactors. These are people who usually pay off their balance each month. These folks tend to be more satisfied with their credit cards than are card holders who carry a balance.

Because transactors don't have to worry about interest rates, they tend to look for cards that provide the best rewards, Taylor says. That makes sense: If you don't pay interest on your credit card, any rewards you receive are gravy.

But some rewards are more satisfying than others. Airline miles are still the most common credit card award, with about 40% of card holders receiving this incentive, the survey found. Still, customers who received cash-back awards, which are available to 22% of card holders, expressed higher levels of overall satisfaction, the survey found. Those who received hotel rewards points — available to only 9% of card holders — also expressed higher satisfaction. That may reflect difficulties consumers have faced in trying to use their airline miles, Taylor says.

The survey also found that most card holders aren't aware of all the benefits their cards offer. Many cards, for example, offer travel insurance, emergency assistance and concierge service. Card holders who take advantage of all their card's benefits tend to be more satisfied.

•Revolvers. These are folks who typically carry a balance on their credit cards. If you fall into this category, forget about rewards programs. You can't afford them.

Cards with generous rewards typically charge higher interest rates, says Greg Daugherty, executive editor of Consumer Reports. If you carry a balance, he says, the amount you'll pay in interest will probably exceed the value of the reward.

Your best bet is to pay off your balance each month. But if that's not possible, look for a card with a low interest rate and no annual fee.

Small is beautiful

American Express ranked highest among the 10 credit card issuers analyzed in the J.D. Power survey, followed by Discover. American Express received high marks for benefits, features and problem-solving; Discover earned good grades for rewards, billing and payments.

American Express and Discover also received high ratings in a recent reader survey conducted by Consumer Reports.

Card holders who carry a balance should also consider cards issued by small banks and credit unions, Daugherty says. These lenders don't have big advertising budgets, so you have to do some research to find them. But the payoff is often lower fees and interest rates, he says.

In the Consumer Reports survey, USAA Federal Savings, which is limited to members of the military, retired military personnel and their families, received a reader score of 95 out of 100 for its American Express and MasterCard-branded cards. Several credit unions, including the Navy Federal Credit Union, also received high marks for their cards. Rates on cards from these lenders ranged from 9% to 11%.

The average rate on a variable-rate credit card is 14.5%, according to Bankrate.com. Card issuers that received the lowest rankings from Consumer Reports readers charged 17%.

You must belong to a credit union to apply for one of its credit cards, but joining a credit union is easier than it used to be, Daugherty says. Many employers sponsor a credit union. You may also be eligible because you live in a certain geographic area or are related to someone who is already a member. The Credit Union National Association offers a credit union locator at its website, www.cuna.org.

Sandra Block covers personal finance for USA TODAY. Her Your Money column appears Tuesdays. Click here for an index of Your Money columns. E-mail her at: sblock@usatoday.com.