Nearly every bank that issues credit cards offers its customers at least one special reward or rebate program. Many reward credit cards leverage relationships with affinity partners, like gas stations, grocery stores, or major retailers. Rebate credit cards often reward customers for making everyday purchases or for paying household bills. When used in a wise manner, rewards cards can really improve your finances and can just be a lot of fun- who doesn’t like free stuff?!? However, five potential drawbacks of reward credit cards can turn these generous bonus programs into financial quicksand

1. Higher Interest Rates and Reward Cards Go Hand-in-Hand. Many cardholders have become savvy enough to know that merchant interchange fees subsidize the most popular reward credit card programs. However, a careful inspection of interest rates among common reward and rebate credit cards reveals another profit center for lenders: high interest rates or APRs (when compared with standard, nonreward cards). Carry a balance, and your finance charge will likely cost you much more than the 1-5% rebate that you earn back in rewards.

2. Reward Cards Can Carry Stiff Interest Charges. One of the pitfalls of rebate credit cards involves reimbursable purchases. Some cardholders use reward cards to earn bonus frequent flyer miles during company trips. Other consumers choose reward cards when purchasing big ticket items from vendors offering mail-in rebates. If your accounts payable department delays your reimbursement or a retailer rejects your rebate claim and you don’t pay your bill in full by the due date, you're on the hook for interest charges.

3. Tempting Card Rewards Can Cause Budget-Busting Expenses. Although some cardholders have perfected the art of paying their reward card bills in full every month (which is the first cardinal rule of leveraging reward cards), following program guidelines might cause other expenses to balloon:

• Some popular cash back credit cards require annual purchasing thresholds that can be hard to reach. Consumers sometimes spend more (than they would if they used a debit card or cash) just to hit these spending thresholds and, in the process, blow their monthly budget.
• Affinity cards that require purchasing at specific stores may cause you to drive longer distances and pay more for everyday goods that cost less at the corner store.

4. Rebate Credit Card Traps Include Redemption and Renewal Fees. Earning enough bonus miles on your airline reward card to fly cross-country might sound like a great deal. However, with redemption fees of up to $75 for each leg of your journey, it can feel like you're paying “through the nose” to get an airline ticket. Likewise, some reward cards have annual fees. Use your card too infrequently and you might end up giving your entire rebate (or even more!) back to the issuer.

5. Reward Credit Card Fine Print Means Benefits Can Disappear Quickly. Many reward programs are scaling back in the "credit crunch" environment. When that happens, cardholders often receive little warning. In some cases, you may have limited options when it comes to converting your reward into cash, points, air miles, or merchandise. Another ugly scenario: program rules buried in the fine print that allow issuers to revoke reward privileges immediately for missed payments or for other problems with your account.

How to Use a Reward Credit Card WiselyWith discipline, it's still very possible to use reward credit cards to your benefit without getting burned. For example, my wife and I have gotten over a 1,000 bucks each year for the past several years using our reward card. So, I personally can attest to just how lucrative these cards can be. To that end, here are some tips to help you get the most bang for your buck:

• Focus all your credit card spending on one or two cards with rewards you're guaranteed to use regularly.
• Remain focused on your overall budget instead of adjusting purchasing to suit your card's program restrictions.
• Review the fine print before accepting any reward credit card agreement.

Keeping track of your spending, in addition to your savings, can help you get the most from your reward credit cards. I hope that you can enjoy your rewards free and clear like I have for years. It’s nice to get something back from a credit card company for a change.