Better option, radio button or dropdown?

Question

On a checkout page we offer the ability to store credit card information. Once a customer has stored their card(s) we need to offer them the ability to choose which card they would like or add a new card.

Which would be a better interface:

1) A radio list that shows each card that has been added, with the last option: "New Credit Card". The "new credit card" option would reveal the CC inputs.

-- OR --

2) A drop-down defaulted to the most recently used card that when clicked reveals all other cards as well as a "New Credit Card" options. The "new credit card" option would reveal the CC inputs.

Answer 1

Ground rule of design when choose between radio or dropdown
If we have 3-4 option then choose radio button if more then choose dropdown.

Comments

Right, but still i see many payment gateways have radio button for option.

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There is no logic, in general payment gateways have 4 options. One more reason could be that in the dropdown there may be a chance of mistake i.e. u select the option but u press up/down unintentionally and this could be a disaster.