Navigating Cash-Back Deals on Credit Cards

When Arnold did the math, the rebate on that card came out to more than 2% back on every purchase he makes this year, so he switched. (The catch: It's a special reward program that Chase doesn't offer everyone.)

Cash-back rewards cards aren't good for people who overspend. Most are targeted to customers who have credit scores above 720. Because the cards tend to have higher interest rates, the rewards are worthwhile only if you don't carry a balance from month to month.

"The consumer can win the rewards card game, but they have to know how to play it," warns Gail Hillebrand, a senior attorney with Consumers Union. "Anyone who doesn't pay their balance in full every single month will lose."

Instead of taking an offer in the mail, you can compare card offers on sites such as Credit.com, CreditCards.com, CardTrak.com, LowCards.com and CardRatings.com.

Once you find an offer that looks better than the one on the card you already have, try calling your current credit card company and getting them to top it. The rebates typically range from 1% to 5% cash back on each purchase you make.

Always read the fine print first, especially when the marketing material looks rosy. The ad for the Citi(C Quote) CashReturns Card, for example, promises a 1% rebate on every purchase and a "20% bonus on the cash back earned on all purchases for the first twelve months."

While that 20% is written in larger font than any other word or number in the ad, if you study the footnote associated with it, you'll learn that what Citi really meant to say by "bonus" was that you'll get 1.2 cents cash back per dollar spent on eligible purchases.