NEW YORK (TheStreet) -- You already know using credit cards can cost you big time. But it can also reward you, now more than any time in the past several years, as credit card companies grappling with a more skeptical market ramp up rewards.
Since September 2013, the value of rewards offered for new cards has risen between 25% and 80% depending on which card you look at, according to a report by Nomura (NMR) investment bank analyst Bill Carcache. Most of the rewards come in the form of cash back, which you can use to pay off future balances.
The extra rewards are arriving as the number of cards used by Americans falls. Last year, 29% of consumers didn't carry one at all, up from just 17% in 2002, according to a Gallup survey. Meanwhile, those who do use credit cards are keeping fewer of them. In 2014, the average number of cards per consumer was 2.6, down from 3.3 in 2002.
Millennials, the largest generation in U.S. history at 92 million, are particularly dubious about using plastic. Per person, the people born between 1980 and 200 carry the fewest credit cards of any age group, averaging 1.57 cards per person as opposed to the 2.66 for Baby Boomers, the next-largest generation.
"Millennials have come of age during a time of technological change, globalization and economic disruption," New York-based investment bank Goldman Sachs said in a report. "That's given them a different set of behaviors and experiences than their parents."
Contrary to popular opinion, Nomura says, card issuers don't seem to be losing money by offering high rewards. They're just sacrificing part of their profit margin.
"We still believe we're in the early stages of the rewards war and expect competition to continue to intensify before it abates," Carcache wrote in the report. "Against this backdrop, we see consumers and the payment networks, Visa (V) and Mastercard (MA), as the biggest beneficiaries."
Want to get the most out of your cards? Following are the ones with the highest-value rewards, as determined by Nomura's report and broken down by the type of purchase for which they are best.
Best for Everyday Spending
If maintaining multiple cards doesn't appeal to you, or you don't buy large quantities of either gas or groceries, try the Citi (C) Double Cash or the Fidelity Investment Rewards American Express (AXP) cards. Each offers 2% cash back and no annual fee or limits on purchases of any type.