Picking the right credit card

NEW YORK (CNNMoney.com) -- Direct mail offers from credit card companies are on the rise, while credit card issuers are making subtle changes to terms to minimize their risk. And that's making it even more challenging to find the right card. Here's what you need to know.

A recent survey by Consumer Reports found that people who had credit cards with USAA Federal Savings Bank and credit unions were more pleased with the terms and service than people who carried credit cards from issuers like JP Morgan Chase (Charts, Fortune 500), Citibank and HSBC (Charts).

To qualify for the USAA credit card, you need a military connection. But if you can join a credit union, you'll likely get charged lower interest rates. Some credit unions even allow members' relatives to join.

It's also worth a phone call to your HR department at work to see if there's a credit union for people in your line of work. Check out the Credit Union National Association at creditunion.coop to see what's available in your area.

Switching your balance from a high interest rate card to a lower one can make a lot of sense. But the windows on those zero percent introductory rate cards are getting shorter.

It used to be that zero percent rates lasted for at least a year. Today, with tightening standards, they disappear in six months. After that, you can be paying rates of 15 percent.

You'll also want to ask about balance transfer fees. More often, credit card companies are getting rid of caps on balance transfer fees or increasing the fees, said Arnold of CardRatings.com.

To find out if you may fall victim to high balance transfer fees, look at your credit card agreement. If there is a reference to a minimum fee for a balance transfer, but there's no reference to a maximum balance transfer fee, chances are, there are no limits to how much money you may be on the hook for, said Arnold.

If you make late payments or exceed your credit limit, you could be shifted to a default penalty interest rate on your credit card. And that means your interest rate could be 20 percent or higher.

In the past, you triggered this kind of penalty if you made a few late payments within the year. But issuers are getting stricter. Now, some cards are imposing these penalties even if your payment is just a few hours late.

Before applying or accepting a credit card offer, make sure you ask what exactly triggers this penalty pricing. Even if you've had the same card for years, it's worth a phone call since credit card issuers can change the terms of your card at any time and for any reason.

"It can change at the drop of a hat," said Arnold.

Before you sign on with a card, look carefully at the credit limit. Most cards use the phrase "up to" when describing what kind of credit limit you can get. Keep in mind that most people won't qualify for this upper range.

In fact, unless your credit score is prime or super prime, you won't get this limit. More frequently, credit card issuers are decreasing credit limits. Even if you already have a card and you may have qualified for a higher limit, the issuer can scale back.

Some subprime card holders have credit limits as low as $250. You'll want to keep a close eye on your credit limit, since it can dramatically hurt your credit score if your balance is close to this limit.