We’ve talked about rewards here before. But, we’ve never really given them an in-depth look. No time like the present, they always say.

Here’s the thing, if you’re carrying a balance on your card, then you’re better off just going with a plain Jane card because you’ll get lower interest. If you pay your balance in full every month and actually care to use the rewards, then they’re not such a bad thing. But, what about for everyone in the middle of these two ends?

According to Consumer Reports, 85% of American households participate in at least one rewards program; however, the study conducted found that most people thought the confusing rules and restrictions were more hassle than they were worth. If you’ve ever read the fine print on your credit card, then you may have noticed that any points you earn are only valid with certain brands, or they simply expire if not used within a certain amount of time.

If you’ve ever had a card with the so-called frequent flier miles, then you’ve probably experienced the irritation of actually trying to redeem them. It was always something; there were blackout dates, the number of points needed for the ticket had suddenly gone up – despite your having just looked at them, or you could only use them for certain airlines, none of which you liked to fly. Then, from cries of outrage, credit card companies started introducing other incentives in order to lure you into charging more.

These other incentives started to come in the form of cash back, where you would either get a check or a credit off your bill. Others use points, which can be redeemed for various items or used for discounts at hotels, restaurants, or even gas stations. While some of these rewards can offer relief with certain purchases, the interest rates often more than make up for what you’re getting back. The study conducted by Consumer Reports indicates that of the more generous rewards programs available, the interest rates varied from 9.74 to 19.99%. Now, I don’t know about you, but there’s not much out there in the way of rewards that would make me want to pay 19.99%. Sure, I pay my credit cards off every month, but what if? What if one month you have to carry a balance? Is it worth it?

But let’s not forget the annual fees that some of these carry. Apparently it’s a privilege just to carry certain cards. I say they should feel privileged to have customers at all in this economy. But, my opinions don’t really mean much to those guys. Still, on top of having a higher interest, you could be looking at pay an annual fee. That negates the savings completely. What’s the point? Prestige? I’ll pass. By the way, with that prestige you’re paying for, some cards tell you that there’s a limit on the rewards that you can earn. So not only do they make you pay for the privilege of owning the card, they dictate how much you can benefit from it.

Consumer Reports also said that because there’s so much hassle with certain cards, people are just leaving the rewards on the table. An estimated 41% are rarely, if ever, using them.

Now, after reading all that I bet you think I dislike rewards. Tsk tsk. I love rewards, and when used appropriately, they can be extremely beneficial. Unfortunately, credit card companies don’t make it easy and people don’t read the fine print. So, following are some tips to help you benefit from your rewards.

Read the fine print

Start by looking at exactly what you’re getting with your rewards program. Are there blackout dates, restrictions, expiration dates, or anything else that limits your use of the rewards?

Look for cards with no annual fee

Sure, that Amex card looks really cool and makes the sound when you slap it on the counter, but do you really need to pay almost $100 a year just for concierge service? Is that really to your benefit when there are other things that could help you save money? Think about it.

Favor cash back

Points very often go unused because it’s a pain to redeem them – a plus for the credit card company who got you to spend more and didn’t have to give you anything in return. Cash back accumulates without you having to do anything and will either be credited to your account or given back in the form of a check, whichever your particular card company prefers. Plus, cash back usually makes out better in rewards than the points do anyway. I mean, seriously, do you need another alarm clock or tent?

Consider where you shop

Opt for cards that allow rewards for places that you frequent often, such as a grocery or electronic store. If you’re not much of a traveler then you won’t have much use for airline and hotel discounts. Use your rewards where they’ll do the most good!

Don’t be tempted

The point of rewards cards is to get you to spend more so that you earn the points. Often we are tempted to put unnecessary items on the credit card with the justification that it’s earning us points. Don’t be fooled, especially if you rarely redeem your rewards!

Use your miles quickly

If you’re still doing the flyer miles and you’ve racked up enough for a trip, use them as soon as possible. Airlines are always changing the redemption policies and with so many struggling right now, there’s no telling what the new rules will be. In the end, it doesn’t really help you to save them.

Skip altogether if you carry a balance

And finally, if you carry a balance, go for a regular card. The rewards are not going to be worth what you’re paying in interest every month. Unless you can get a card with 0% for a period of time, it doesn’t really benefit you – though I’d venture to say that you’ll want to read the print and make sure that you accrue rewards during that promotional period.

So, do you carry rewards cards? If so, have they been helpful or more hassle than they’re worth?

Related posts:

1. Don’t fall into the ‘Rewards Trap’
2. Rewards Credit Cards: Are They Still Worth It?
3. Guide: How to Pick the Right Credit Card
4. In Defense of Credit Card Fees
5. Black Friday and Cyber Monday: Get More Rewards!