Navigating Cash-Back Deals on Credit Cards

If you were ever thinking that you might enjoy getting paid in cash to use your credit card, now might be a good time.

As many consumers begin to grub for extra pennies in the face of a teetering U.S. economy, companies have kept up the ante on cash-back rewards cards in recent months. They mailed out 1.118 billion such offers in 2007, up from 1.086 billion during the previous year, according to the market research firm Mintel Comperemedia. This took place even as direct mailings in general declined.

"They're trying to stand out compared to the competition," says Christopher Zagorski, a senior analyst at Mintel. He adds that companies also want to encourage you to use your card for everyday purchases, as opposed to only on a big weekend spree or a plane ticket.

Curtis Arnold, founder of CardRatings.com and author of a book scheduled to be published in July, How You Can Profit From Credit Cards: Using Credit to Improve Your Financial Life and Bottom Line, has put as many of his expenses as possible on his cash-back rewards card for years.

Arnold has five children to feed, so even his grocery bill gets high, and his family typically spends several thousand dollars each month.

Last year, Arnold earned more than $1,000 in rebates on his Blue Cash from American Express(AXP Quote) card. Then, in November, he got an offer from Chase Card Services, a unit of JPMorgan Chase(JPM Quote), promising him $1,000 back if he spent only $48,000 this year on his card.

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