• by Aaron Baar , June 3, 2008

Rewards programs have been a staple of credit card marketing for some time, with companies offering everything from airline miles, to free gasoline to cash back for purchases. But thanks to two new studies of the programs, consumers may begin scrutinizing the offers more carefully, and rewarding those that offer more generous programs and ease of use.

In its upcoming issue, Consumer Reports says the increasingly complex rules, regulations and limits on credit card rewards programs make many of them not worth the effort. "Carrying the right cards and ignoring the rest can save you a little money on your purchases, but consumers must choose programs that compliment their spending habits," said Amanda Walker, senior project editor at consumer reports, in a statement.

According to the publication, about 85% of U.S. households participate in at least one rewards program. And a poll of Consumer Reports' "Money Adviser" subscribers found that 41% of them carried three to five cards, while 9% had six to nine cards.

And not all credit card reward programs are created equal, according to Consumer Reports. The publication found that rates varied from 9.74% to as high as nearly 20%, which can nearly eliminate any value of the rewards, if a consumer carries a balance, Walker said.

Separately, financial website Bankrate.com recently completed an evaluation of the top 30 cash-back rewards programs from 9 of the top 10 issuers in the country, with an eye toward determining which programs help which consumers. Among other things, the company's report warns consumers to read the fine print on the offers, looking for caps on how much cash can be earned back and enrollment or annual fees, says Ellen Cannon, managing editor of Bankrate.com.

For instance, when a credit card company says it will deliver cash back on grocery purchases, for the most part those purchases are limited to items made strictly at grocery stores. Grocery items purchased at Target or Wal-Mart likely would not be recognized by the program, she says.

Credit card companies, however, are getting better when it comes to offering more and better programs, particularly when they partner with retailers on specific purchases, offering an enticing 20% back on certain purchases or purchase types, Cannon says. Others have eliminated annual fees and are offering automatic redemption checks or credits when certain thresholds are met. "It makes it simple, which is what [consumers] are looking for," she says.