How to choose a credit card

Miles? Cash back? Here's some advice.

1. Reduce the rewards to dollars. "Finding the best rewards package involves cutting through a lot of noise," says Tim Chen, founder of NerdWallet.com. He recommends boiling down different rewards, from airline miles to points, into a dollar value, and making an apples-to-apples comparison. Then, "choose the card with the highest reward rate," he says. It's difficult to do manually, which is where comparison sites such as NerdWallet come in.

2. Determine what you will use them for. Curtis Arnold, founder of credit card information site CardRatings.com, says you should also consider what, exactly, you use your credit cards to purchase. Some cards offer higher rebates on certain types of spending, such as groceries or gas.

3. Don't limit your options too early. Credit cards today come in many different forms. Options include cash back, travel rewards, zero percent rates, prepaid debt cards, gas cards, and department store cards. Mary Ann Campbell, who teaches personal finance at the University of Central Arkansas and serves as spokesperson for IndexCreditCards.com, recommends deciding which categories fit your needs best before narrowing down the field.

When it comes to things like auto rental protection and limited fraud liability (up to $50), almost all credit cards offer the same protection, adds Chen. "Where you start to see big differences are in purchase protection, return protection, and extended warranty benefits," he says.

4. Take advantage of the Internet. Online comparison sites, including BankRate.com, Credit.com, CreditCards.com, CardRatings.com, IndexCreditCards.com, and NerdWallet.com make it easy to sift through hundreds of credit cards in minutes. Many of these sites also offer tools such as debt calculators. Arnold recommends also visiting the sites of card issuers themselves, especially after you've narrowed your choices down to a handful of cards. You might find more information or promotional offers.