Here are eight strategies for super-sizing your rewards:

1. Set priorities.
First off, decide how much time and energy you are willing to devote to managing and tracking rewards.

“For some people, playing the rewards credit card game is a serious hobby, and they devote a considerable amount of time and energy to it,” says Tim Winship, publisher of FrequentFlier.com. “But most people don’t want to do that. That’s something you have to consider up front.”

Rewards credit cards vary widely in how easy they are to use. Some come with complex terms like tiered rewards that kick in after a certain amount of spending. Or, as is the case with many airline credit cards, you may be able to earn maximum rewards only after you reach elite status. If you have the time to track rewards earnings and reap top-tier rewards, this is all well and good. However, if time is an issue, stick with simpler rewards credit card programs.

There are websites, such as MileWise.com, that can also help you keep track of your rewards.

2. Match rewards cards to spending patterns.
Cards with the best rewards perks typically come with an annual fee, but many also have a no-fee version. To find out which is best for you, do the math to see which card best fits your spending pattern.

For example, for a $75 annual fee, the Blue Cash Preferred Card from American Express rewards 6 percent cash back on supermarket purchases, 3 percent on gas purchases and 1 percent on everything else. Alternatively, the Blue Cash Everyday card (which has no annual fee) gives 3 percent back on supermarket purchases, 2 percent on gas and department store purchases and 1 percent on everything else.

To determine which card is the best fit, check how long it would take you to earn back the annual fee. With Blue Cash Preferred, you earn an additional 3 percent on supermarket purchases. That means an extra 3 cents for each dollar spent. To earn back the $75 annual fee, however, you’d have to spend $1,250 each year at the supermarket before the extra earnings kick in (ignoring for the moment any extra earnings on gas and department store purchases). For a family spending a lot of money on groceries each month, the annual fee might be worth it, but, for a single person, it might not be.

3. Mix and match.
When it comes to maximizing rewards, it often makes sense to mix and match rewards cards. In addition to picking a credit card that enables you to leverage spending on purchases made in supermarkets, drug stores and gas stations, consider getting a card that offers cash back in rotating categories, such as the Chase Freedom Card. Alternatively, if you travel frequently, find an airline rewards card that will let you earn the most benefits on travel and travel-related purchases.

4. Pick a primary card.
While strategic mixing and matching of rewards credit cards can be a great way to maximize earnings, be careful not to spread yourself too thin.

“People often get themselves involved in too many rewards programs, so that their earnings are diffused over multiple programs,” Winship says. “It’s very important to consider your options from the beginning and try to focus your earnings activity on one primary program and one or two secondary programs. Don’t fall into the trap of participating equally in several programs.

5. Put your fixed monthly expenses to work.
As much as possible, use your primary rewards card to pay your regular monthly bills, such as telephone bills, mortgage, cable bills and so on. Just make sure to budget for your charged fixed expenses so you can pay the credit card bill when it’s due.

6. Don’t forget about business expenses.
If you run a small business, look into getting a business credit card that will give you cash back on qualifying purchases such as computers and electronics, office supplies, phone bills and transportation. With the Chase Ink Cash Business credit card, for example, you can earn 5 percent cash back on the first $25,000 spent annually on office supplies and phone and cable expenses.

7. Spread it out.
Get a card for all members in the household responsible for making purchases to earn rewards on all expenditures. If you have employees who make purchases for your business, get cards issued for them as well; it automates expense reporting, and you can set spending limits to protect the bottom line.

8. Don’t forget about the big picture.
Keep the larger picture in mind when you’re making small financial decisions like applying for a new rewards credit card.

“We play all these games on credit cards to get better rates on balance transfers or rebates on rewards credit cards,” says Michael Rubin, author of the book “Beyond Paycheck to Paycheck.” “But to the point that this throws your FICO score so you go from the highest credit score to the next one down, you end up costing yourself much more than you’ll ever save.”

A final reminder: Be sure to pay off your balance in full on your rewards credit cards each month. Otherwise, you’ll end up paying more in interest than you will earn in rewards. If you need to carry a balance, look for a card that offers the lowest possible interest rate rather than a rewards card.

If you have a habit of using only some of the rewards points you earn, you’re not alone. The average American household is signed up for more than twice as many rewards programs as they use, according to the market research firm Colloquy. And approximately $48 billion worth of rewards earnings go unredeemed every year, according to an April 2011 study by the same firm.

“Consumers on average leave about $205 dollars in rewards earnings on the table every year,” says Jim Sullivan, a partner at Colloquy. “And, since rewards memberships are growing, that’s likely to be a growing number as well.”

According to Sullivan, consumers are scattering themselves over so many rewards programs that they are struggling to keep up with them.

Many consumers with multiple rewards cards also tend to forget about their rewards balances — especially when the balances are are so small they’re easy to overlook. However, the value of those balances can add up quickly.

Here are five tips for making over your rewards card habits and redeeming the full value of your cards.

1. Consolidate.
It’s tempting to sign up for numerous rewards credit cards just to take advantage of the lucrative rewards bonuses, but that might not serve you well in the long run, say experts. Sullivan recommends focusing on one or two rewards programs and maximizing their benefits.

“To maximize value, consolidate around the loyalty program of the retailer where you spend the most dollars,” says Sullivan. “In addition, have a primary credit card with rewards features that match your spending patterns and rewards preferences, and put most of your spending on that.”

2. Set priorities for rewards earnings.
To consolidate, you’ll need to decide which type of rewards are the most important to you. Do you want to stretch your hard-earned dollars by earning cash-back and saving on your purchases? Or, are you after perks such as free airline tickets or frequent flier elite status so that you can enjoy greater comfort when traveling?

Once you decide which types of rewards you truly prefer, concentrate spending in that program to maximize earnings.

3. Plan ahead to take advantage of special rewards card offers.
Keep an eye out for special offers throughout the year. Many cash-back credit cards, such as the Chase Freedom card and the Discover More card feature a 5 percent cash-back bonus in rotating categories throughout the year. Plan ahead so that you can concentrate purchases in those specific categories as they come up (and remember to sign up for the special cash-back deal on the card issuer’s website).

Similarly, over the holiday season, most rewards credit cards feature extra points for shopping via the card issuer’s website. For example, depending on the rewards program, shopping with large retailers such as Kohl’s, Apple, Macy’s or Amazon can earn you five to ten points per dollar spent in the holiday season compared to the rest of the year. Even if you’re already done with your holiday shopping for the year, check your card issuer’s program so you can plan ahead for next year’s holiday shopping.

4. Maximize redemption value.
Shopping around for the best redemption opportunities can be a great way to supersize rewards even further. The average rewards point is worth one cent (the equivalent of 1 percent cash back), so use this as a rule of thumb when valuing redemption offers.

Many rewards card issuers feature partner offers from major retailers, which give you greater value for your points. For example, with many rewards cards, $90 in rewards earnings can be redeemed for a $100 gift card with leading retailers, such as Land’s End, Macy’s, Kohl’s, Barnes & Noble and so on. That’s a 10 percent greater redemption value. In some cases, you can find even better value on gift cards for a savings of 20 to 30 percent, so this is an avenue well worth exploring.

5. Use a rewards management website to manage and track multiple accounts.
If you have multiple rewards accounts, consider using a rewards program management platform such as Points.com to track and manage your rewards programs. The site lets you keep track of your rewards earnings in up to 100 rewards programs, get alerts about special offers from the rewards programs you are enrolled in and trade or buy points from other members. Trading or buying comes at a cost, however, so be sure to take that into account before using that option.

The strategy worked like this: Take out a no-fee balance transfer with a promotional 0 percent interest rate and invest the money in a high-yield savings account that pays 3 to 5 percent interest. Then pay off the balance transfer at the end of the promotional period with the money from the savings account and pocket the accumulated interest. Rinse, repeat and watch your profits grow.

Thus, the so-called App-O-Rama was born. A term originally coined in personal finance forums, such as FatWallet.com, App-O-Ramas refer to credit card application sprees in which consumers apply for numerous credit cards within a short period of time and profit from the deals.

The practice was once lucrative for many. But when lending standards tightened following the 2008 financial crisis and interest rates for savings accounts plummeted, App-O-Ramas became a dying breed.

However, the App-O-Ramas (AOR) of yore may be staging a comeback, say experts, albeit in a new and altered form. A new generation of AOR-aficionados are targeting rewards credit card bonus sign-up offers, rather than 0 APR balance transfers.

Take, for example, blogger Daraius Dubash of MillionMileSecrets.com, who, in one App-O-Rama, applied for six credit cards in one sitting and netted 305,000 bonus miles and points. At an estimated redemption value of one cent per mile or point, that’s the equivalent of about $3,000 dollars in free rewards travel. Not bad for a few mouse clicks.

Dubash’s sign-up bonuses included a 75,000 miles bonus for the Citi Aadvantage Card, a 40,000 miles bonus for the Bank of America Alaska Air Visa and a 50,000 miles bonus for the Chase Southwest Airlines Visa card, among others.

Playing the App-O-Rama game
So how do the pros plan their App-O-Ramas? And what are the pitfalls? (Surely, card issuers don’t just sit by idly while consumers pocket millions of bonus miles.)

According to the AOR pros, if you know how to play the game right, there are plenty of upsides and few potential downsides. Dubash, for example, says that he applies for as many as four to five cards every three months, prioritizing the cards with the highest bonuses or limited-time offers. He also looks for cards with minimum spending requirements that are realistic for him to manage.

Of course, the best credit card offers and sign-up bonuses are only available to those with excellent credit. And so, because he applies for credit cards often, Dubash tries to minimize the impact on his credit score by applying for credit cards from different banks.

“Banks usually request a copy of your credit bureau from at least one (sometimes more) of the three main credit bureaus Equifax, Experian, and TransUnion,” says Dubash. “The exact credit bureau used depends on where you live and which bank you’ve applied for credit from.”

By rotating credit inquiries between different banks, Dubash explains, he can limit the number of inquiries to each of the credit bureaus. So, for example, if Bank of America pulls his credit report from Equifax, and Chase uses his Experian credit report, the impact to his credit score is less than if he applied to two banks that pulled the credit report from the same rating agency.

Using this system of rotating credit inquiries, Dubash says he succeeded in minimizing the impact on his credit score from his most recent six applications to just 11 points — from 749 before the applications to 738 after he was done.

The downside of credit card application sprees
Applying for multiple credit cards is not bad, in itself, say experts. In fact, they point out, having multiple credit cards is usually considered to be an advantage.

“If you can open new credit cards without being tempted to overspend, in the long run that is a positive for your credit,” says Maxine Sweet, Vice President of Public Education at Experian. “Scoring models add all of the revolving accounts together, so the combined credit utilization will tend to be lower if you have multiple credit card accounts.”

But there are downsides to this approach, even for the savviest consumers. Experts warn that going on a credit card application spree could have unexpected consequences.

“It’s a little bit like playing with fire,” says Experian’s Sweet. “As long you don’t need new credit and don’t have to worry about a few points off your score, it may be okay. However, I would proceed with caution.”

Here are the main potential pitfalls of going on a credit card application spree:

• It’s easy to spend more than you save. Don’t apply for multiple credit cards if you are unable to pay the balance off in full each month, says Dubash. The interest costs will quickly eat up any potential rewards earnings. And, of course, if having credit available is a temptation to spend more, you could end up losing out big time.
• Your credit score will get dinged. Each time you apply for a new credit card, your credit score takes a three to eight point hit (depending on credit scoring models and other factors in your credit report). Also, banks look at recent credit applications when evaluating big loans. So if you’re planning a major loan application such as a mortgage, your main focus should be to improve your credit score to make sure you get the best possible rates. Otherwise, a little App-O-Rama adventure could quickly lead to higher loan costs and cost you several times the amount saved.
• Card issuers could flag your accounts for adverse actions. Perhaps the greatest potential pitfall of App-O-Ramas is that card issuers could take notice and flag your account for adverse actions, such as credit limit cuts or even account closings. Banks aren’t exactly in the business of handing out free money, and if they see someone gaming the system, they may take action. Several forum users at FatWallet.com report seeing credit limit cuts of 50 to 95 percent of the available limit on cards. For consumers carrying a balance on their credit cards, limit cuts of that size could seriously affect credit scores by amplifying credit utilization rates.

“You definitely need to know what you’re doing, if you apply for multiple cards,” says Dubash. “You must spread it out across different credit bureaus to minimize the credit inquiries. And it’s important to avoid doing anything that can indicate that you might be a risky borrower, like carrying high credit card balances or paying late.”

However, the card with the most lucrative bonus doesn’t necessarily offer the best long-term value. Here are eight tips to make sure you choose the best travel rewards card for you.

1. Keep it simple.
When choosing a travel rewards credit card, your first rule of thumb is to keep it simple.

“For some people, playing the travel rewards cards game is a serious hobby, and they devote a considerable amount of time and energy to it,” says Tim Winship, publisher of FrequentFlier.com. “However, most people don’t have the time for that. For most consumers, the best approach is to keep it simple, and focus on just one or two programs.”

According to Winship, consumers who sign up for numerous travel rewards cards typically end up diffusing miles earnings over multiple cards, which can be hard to redeem.

“Having 10,000 miles here, 7,000 there and 13,000 miles on another card doesn’t do you much good. There is no easy way to consolidate all those miles,” says Winship. “As a result, many people end up leaving money on the table, because they don’t earn enough to redeem rewards for free travel.”

2. Ask yourself: Are you a traveler or a charger?
Travel rewards cards come in two main categories: Frequent flier credit cards and generic travel rewards cards.

Frequent flier credit cards, such as the American Express Delta SkyMiles card or the United Mileage Plus Rewards card, are affiliated with a specific airline. Frequent flier card holders can earn miles through credit card charges and through air travel with the affiliated airline. Miles earnings can only be redeemed on the affiliated airline and its partners, however.

Travel rewards cards, such as the Chase Sapphire or the Capital One Venture card, offer more flexibility for redeeming your rewards because you can book your rewards ticket on the airline of your choice. These cards also give cardholders a greater range of redemption options. For example, rewards earnings can be cashed in for free hotel stays, car rentals, cruises and so on. However, you can only earn miles through charges to your card, not through your travel.

“Both types of cards have advantages,” says Winship. “You can’t say which is going to be best — it depends on your situation.”

If you travel a lot and are able to do most of your travel with one airline, an airline affiliated card will be your best bet. “However, if you earn most of your rewards through purchases and transactions,” Winship says, “you will be better off with a generic travel rewards card like the Chase Sapphire or Capital One Venture cards.”

3. Look for hybrids.
The most valuable credit cards are sometimes generic travel cards where the points can be transferred to airline miles with a large selection of airlines of your choosing.

“Credit cards that allow you to transfer points to the largest number of airlines often give you the best value, and they offer the most flexibility,” says Gary Leff, co-founder of the frequent flier community milepoint.com. These cards are particularly useful for consumers whose goal is to earn miles toward premium travel upgrades, rather than “just” free trips, says Leff.

4. Check rewards earnings per dollar spent.
Typically, rewards cards let you earn one point or one mile for each dollar spent. However, some cards give you extra points for dollars spent on certain types of purchases, such as in supermarkets, gas stations and drugstores.

This can be easy to overlook, particularly if the card comes with a generous sign-up bonus. However, if you earn most of your rewards through credit card charges, you’re better off ignoring cards with flashy bonuses and lower earnings and going with the card that gives you the highest rewards earnings.

5. Watch out for minimum spending requirements.
Many travel rewards cards tie bonus rewards to a minimum spending requirement, which can run as high as $3,000 in the first three months — or higher. Typically, the higher the bonus reward, the greater the spending requirement is.

When comparing card offers, consider whether or not you usually charge this much to your card. No matter how tantalizing the bonus, you don’t want to have to change your spending habits to earn it.

6. Determine the true redemption value of your rewards earnings.
When it comes to travel rewards cards, a point or a mile means many things.

Some cards will award you a free flight with as little as 20,000 points. Others will offer a redemption value higher than one point or one mile per dollar.

Checking out the redemption value can also unearth unexpected benefits of a card (and vice versa). The American Express Blue Sky card, for example, awards one point per dollar spent. However, every 7,500 in points earnings can also be redeemed for a $100 statement credit toward the purchase of any airline ticket, hotel stay or car rental. That turns the effective redemption value into about 1.33 cents per dollar spent — higher than the typical one cent rewards value per dollar spent.

7. Ask: Is the rewards redemption value the same for all rewards?
While most generic travel rewards cards provide more flexibility for redeeming earnings, some offer a lower redemption value when you redeem for certain types of rewards.

For example, the Capital One Venture card lets cardholders earn a full two points per dollar spent. For airline travel redemptions, those rewards earnings can be cashed in for a value of two cents per point. However, redeem rewards earnings for cash-back, and the rewards value goes down to one cent per dollar. To avoid surprises, check the terms and conditions or call the card issuer to ask.

8. Check whether the rewards earnings expire.
Many cards require you to have some type of account activity — either by purchasing a ticket or redeeming miles — at certain intervals, such as every three years, in order to prevent your points from expiring.

“There are obvious benefits to taking advantage of these kinds of rebates and discounts on everyday purchases, as long as it doesn’t change your spending pattern,” says Michael Rubin, author of “Beyond Paycheck to Paycheck: A Conversation About Income, Wealth, and the Steps in Between.” “Gas in particular is a great rebate category to take advantage of because you spend what you spend. The temptation to spend more just because you get a discount is not there.”

There are two basic types of gas credit cards: The first category includes generic rewards credit cards that offer higher rebates on gas, grocery and drug store purchases. These are available online or through mailed credit card offers. The second type of gas credit card includes cards issued in affiliation with a specific oil company, such as BP, Chevron, Exxon or Texaco. These are available through gas stations, online or via mailed offers.

Both types of credit cards offer unique benefits — as well as significant pitfalls that can undermine your budget. Here are some tips on how to compare both types of cards and choose one that will help you save on gas year-round:

Rewards credit cards with gas rebates
Many cash-back credit cards offer higher rebates on certain purchases, such as gas, grocery and drug store purchases. The type of reward and the percentage earnings vary considerably from card to card, so it pays to look carefully at the terms and conditions.

Some cards, such as the Chase Freedom card and the Discover More card let you earn 5 percent cash-back up to a certain limit on travel-related purchases, such as gas, hotel and airline tickets.

However, that 5 percent cash-back rotates every three months. So, for most of the year, the card only offers 1 percent cash-back on gas purchases (and, in some cases, even less than that).

Other cards come with attractive introductory offers, such as cash awards or bonus points for signing up. Or they come with double cash-back earnings during the first month you hold the card.

The bottom line: Don’t get lured in by the introductory offers with all the bells and whistles. Instead, look for the card that offers the best long-term value. A card that lets you earn 2 to 3 percent cash-back on gas purchases year-round will save you more money in the long run than a card with 5 percent cash-back for three months. In addition, look for cards that offer more cash-back on everyday purchases, such as groceries and drug store purchases.

Gas station cash-back credit cards
If you tend to pull in at the same gas station chain each week, a co-branded gas rebate card is another option to consider. Most gas station credit cards offer rebates in the form of 10 to 15 cents cash-back per gallon bought.

Of course, gas prices change over time, so the percentage value of that cash rebate varies. However, assuming a gas price of $3.30 per gallon, 10 cents per gallon translates into a 3 percent rebate, and 15 cents per gallon translates into about a 4.5 percent rebate. That’s significantly higher than the cash amounts offered by generic cash-back credit cards.

That said, there are other factors to consider when comparing these types of cards, so be sure to read the terms and conditions carefully. Some notable terms to check before applying for a gas station credit card include:

• Commercial exclusions. Some cards exclude rewards for commercial purposes, so if you drive frequently for your business, avoid cards with these kinds of exclusions.
• Tiered rewards. Many gas station credit cards offer rebates on other purchases, but the rewards tend to be tiered. For example, the issuers start users out with cash-back earnings of 0.5 percent and only allow the cardholder to get the full rebate advertised (typically 1 percent) after the cardholder has charged a certain amount to the card each year.
• High interest rates. APRs on gas station credit cards can run as high as 23.99 to 26.99 percent so look carefully at the APR range offered on the card. Also watch out for minimum interest charges, which typically run from $1 to $2.99. Minimum interest charges mean that if you carry a low $50 balance, you will still be charged a minimum of $2.99 in interest — which translates into an APR of 72 percent! As always, the devil is in the details.
• Confusing rebate requirements. Before you apply, also check to see how your earnings will be redeemed. In some cases, you have to request your rebate in order to receive it, or you have to cash in your miles or points, so make sure you know upfront how to do that. Your points or miles may also expire, sometimes in as little as six months, if you don’t convert them to rewards within a given period of time. So be sure to familiarize yourself with the rules before you apply.

The bottom line: No matter which gas rebate card you choose, the benefits that you get from it will depend on how well you manage it. As with all rewards or cash-back credit cards, your savings can quickly be undermined by high interest charges if you carry a balance.

“Like any rewards credit card, gas rebate cards can be useful, if you pay off the balance in full each month before interest sets in,” says Bruce McClary, Media Director with ClearPoint Credit Counseling Solutions and a certified financial educator. “If you don’t, those earnings are going to be offset by interest charges, and you won’t reap the benefit of those rewards earnings.”

(Article updated 8-30-2011. Originally published 5-22-2009.)

Wherever my husband goes, his credit card goes. Whenever we make travel plans, considerations of his rewards earnings come first. There are times I wonder: If push came to shove, would he choose his rewards card over me?

It all started three years ago when we were stranded in the check-in line at the Copenhagen airport. Something about standing in line for three hours watching people breeze through the priority check-in next to us really got my husband’s goat. By the time we carted our mountain of suitcases up to the check-in counter, my husband had loaded up on everything he could related to the Delta Skymiles Priority program — including an application for the American Express Delta SkyMiles rewards credit card.

It was love at first sight. Once he discovered that the SkyMiles rewards card could get him into that priority check-in line without paying a penny more, my husband never looked back. He spent days studying the obscure rewards earnings rules for the card. He pontificated on the virtues of MQMs (Medallion Qualification Miles) over regular miles earnings till my eyes glazed over (and I write about this stuff for a living). He began flying out to visit his adult son or daughter every few months, just so he could meet some key mileage earnings benchmarks (okay, he wanted to see his kids, too). And he cajoled me into becoming a joint account holder on his card so he could meet the spending goals for his Medallion upgrades.

I was skeptical. But my misgivings about my husband’s dalliance with his rewards card came to an abrupt end this summer when, on our way back from Europe, we were both upgraded for free to the Business Elite section on the long leg back over the Atlantic. As for the long wait in the check-in line? We breezed through that coveted SkyMiles Priority line in a matter of minutes. So, for now, I’m a convert.

Without a doubt, there are some great winnings to be had in the rewards credit card game — if you play by the rules. However, despite the perks that come with having a rewards card, there are plenty of mistakes to be made with these types of cards. And we all, my husband included, make some of them from time to time.

Here are six of the most common:

1. Getting seduced by teaser rates and weasel terms.
Rewards card offers are dressed up to look their smashing best; but behind the glitter, many lack substance. Some cards, for example, offer 3 percent cash-back on groceries or on gas; but read the fine print and you will likely find that offer is only valid for the first six months. Other cards will tie rewards to spending limits, so you only receive the rewards earnings advertised after a certain amount of expenditures each year. Or they may offer 5 percent cash-back in rotating categories, but subject earnings to a spending limit each quarter.

“To win at the rewards card game, you have to read the terms carefully,” says Gail Cunningham, Vice President of Public Relations at the National Foundation for Credit Counseling. “As appealing as that 5 percent cash back card may sound, if the categories change from quarter to quarter and there is a spending limit, it’s not that great after all.”

How to avoid this mistake: Read the footnotes. This is where you will find the key information needed to evaluate the card. Check the card terms to be sure you fully understand all the details of the offer. And, of course, avoid carrying a balance. After the promotional period expires, that rewards card APR will likely be high.

2. Getting a card that doesn’t fit your lifestyle.
No matter how great the rewards may be, they won’t matter if your income and lifestyle don’t match. For example, a rewards card offering high cash-back tied to a spending tier may not provide you with the best value if it takes you six months or longer each year to reach that tier. Similarly, a frequent flier card with a killer sign-up bonus may not be worth it if that airline doesn’t have good connections from your town.

How to avoid this mistake: When choosing a rewards credit card, take into consideration your lifestyle, spending patterns and rewards preferences.

3. Not using your rewards.
Despite their popularity, rewards earnings often go unused. An estimated one third of rewards earnings are not cashed in each year, according to a recent study by marketing firm Colloquy.

“Many consumers are scattering their efforts across numerous loyalty programs, not wanting to pass up on any good opportunities,” says Jim Sullivan, a Colloquy partner. “Unfortunately, the downside is that those loyalty rewards often go unredeemed. People get too busy with their lives and forget about low-priority programs.”

How to avoid this mistake: Simplify. Earning rewards on numerous cards makes it time-consuming and cumbersome to redeem earnings. Instead, focus your spending on one or two rewards credit cards to consolidate earnings.

4. Forgetting about annual fees.
Most rewards credit cards come with an annual fee, which your friendly card issuer will kindly waive for the first year. Why? Because it helps to encourage consumers to sign up just to get the rewards card bonus, thinking they’ll cancel the card the following year. But guess what? Many never do.

How to avoid this mistake: Avoid applying for credit cards and canceling them frequently, as this could hurt your credit score. Instead, do the math before applying. If the annual fee isn’t worth it, this is probably not the best rewards credit card for you.

5. Not knowing the rewards card features.
Rewards card programs range from those offering simple cash-back to those with complex multi-tiered rewards. If you have the time (and patience) to study and take advantage of multi-tiered rewards, these types of programs offer some of the best rewards in the industry. However, taking advantage of extra perks takes time and attention — which are in short supply for many people.

How to avoid this mistake: Choose carefully. If your time or your desire to tackle a complex rewards program is limited, check out offers with a simple rewards structure coupled with high earnings. (Yes, they exist.) And if you’re feeling more ambitious and want to tackle a complex program, do your homework first to find out what you need to do to make the most out of your card.

6. Spending more than you otherwise would.
Would you spend extra money just to earn a 1 to 5 percent discount? Of course not. But millions of cardholders do it all the time. According to a 2010 study by the Federal Reserve Bank of Chicago, cardholders scaled up their spending to the tune of $76 more a month for nine months after being offered cash-back.

How to avoid this mistake: Before you’re tempted to spend that extra money to reach a higher rewards tier, do the math. Are you spending more than you’ll actually earn back in cash? In most cases, you will find that the added earnings don’t justify the extra expense.

Luxury credit cards for the rich and connected are all the rage from the Hamptons to Hollywood. And they don’t just pay for dinner at New York’s swankiest restaurants or give you exclusive access to luxury rewards. These cards come with special perks, including the ability to charge a $50,000 purchase in the blink of an eye.

Reserved for the Rolex-wearing, Ferrari-driving glitterati of the world, luxury credit cards feature the latest in rewards bells and whistles, as well as exclusive lifestyle benefits. (Some of the more modest perks that these cards offer include personal shopping services at luxury retailers and complementary first class upgrades on flights.) And in case you wonder if the ultra-wealthy would even bother with earning credit card rewards, wonder no more.

“The affluent absolutely do participate in rewards credit card programs,” says Kelly Hlavinka, a Managing Partner at Colloquy, a company specializing in resources for the loyalty marketing industry. “In fact, according to Colloquy’s research, over 63 percent of the affluent participate in at least one rewards program with a financial services provider – compared to only 50 percent of the general population.”

In fact, notes Hlavinka, wealthy cardholders are even more likely to participate in credit and debit card rewards programs now than before the recession. The affluent participate in 9 percent more credit and debit rewards programs today than prior to the financial meltdown.

So if you too are in the market for a high-end credit card — or if you would simply like a glimpse into the rarefied world of luxury credit cards — here is a selection of some of the glitziest credit cards available for the wealthy elite.

American Express Centurion card
Like other cards in its category, the American Express Centurion card is available by invitation only. The American Express website is mum about the exact benefits of the card, but promises that Centurion cardholders will enjoy access to services that only a select few from around the world can enjoy.

Doesn’t sound bad at all. So, what do you get if you can afford the $2,500 annual fee, the $5,000 opening fee and the minimum $250,000 spending requirement? According to Forbes magazine, benefits include preferred pricing on luxury rental cars, access to discounts on luxury cars and lowest-price guarantees when buying through the American Express Auto Purchase program.
Other benefits include personal concierge services when traveling, invitations to exclusive arts and sporting events, access to American Express’s private yacht program, elite club memberships and special shopping privileges at exclusive stores.

The greatest benefit by far? According to one commenter on Forbes.com: “That you can flash your titanium card and impress other people next to you — unless you live in LA or NYC. There are so many Centurions in those cities that you’d think they were standard issued along with a Mercedes and BMW.”

Coutts World card
For those Mercedes and BMW-driving New Yorkers (and anyone else) who want an extra edge, the Coutts World card is said to be the most prestigious credit card of all. For starters, Coutts itself is so exclusive that the main feature of the ‘About’ section on the bank’s website is a family tree of the principals, dating back to 1712. And, yes, you guessed it: Coutts offers banking services and wealth management services to a very select world elite, including the Queen of England.

Special benefits of the Coutts World card include a rewards program for luxury purchases, priority access to exclusive airport lounges and a personal concierge to assist with travel arrangements, yacht chartering and ticketing for sports and arts events. In addition, the Coutts personal concierge can also help with organizing exclusive shopping session and, should the need arise, with “sourcing domestic staff, including cleaners, gardeners and nannies,” according to the card website.

Visa Black card
Issued by Barclays, the Visa Black card is billed as “the world’s most prestigious and versatile credit card.” According to the TV ad featured at the Black card website, that includes covering the services you need when you feel like diving into the ocean from a helicopter (the versatile services in this case being the helicopter and lots of cool dudes in black standing by with fresh, dry towels … Hey, a girl could get used to that kind of life.)

For those less fond of swimming, the card offers similar benefits as other luxury credit cards, including exclusive 24-hour concierge service, VIP airport lounge access, entertainment planning, business services, luxury gifts and, of course, limited membership.

Prefer a MasterCard? The World Elite MasterCard is MasterCard’s answer to the Visa Black card, offering very similar features with “a personalized service that can help you experience life’s most memorable moments.”

U.S. Bank Stratus Rewards White card
Where there’s a Black card, sooner or later there will be a White card as well. The U.S. Bank Stratus Rewards White card bills itself as the card for those who like to live life to the fullest, or more specifically, at 40,000 feet. This is the card for those who are ready to chuck “the mundane, the pedestrian and the unromantic” and who share a passion for “a privileged lifestyle.” What’s not to like?

Of all the luxury cards, the Stratus Rewards White card puts the greatest emphasis on branding itself as a “lifestyle enrichment” card, offering by-invitation only access to some of the world’s most exclusive niche lifestyle clubs. In addition to life-inspiring experiences, rewards points earned with the card can be redeemed for private jet travel, rare auction items or “difficult to obtain” items.

Membership is set at an annual fee of $1,500 and available only by nomination from partners of the Stratus Rewards or through the recommendation of someone who is already a member.

In short, when it comes to credit card perks, life is good for the rich and connected. Meanwhile, for the rest of us, take heart. You don’t have to have a million-dollar-plus net worth or shell out a $2,500 annual fee to find credit cards that offer at least similar benefits. You can find personal concierge services and access to exclusive events, global travel assistance and extended purchase protection on a number of credit cards, including those without an entry fee.

Carrying a credit card and using it responsibly is one of the easiest ways that you can build good credit over time. But if you think you might need some help to keep from falling back into bad credit card habits, take note: Some credit cards actually reward cardholders for good financial behavior.

The ability to learn good credit management skills with a carrot instead of a stick has undeniable appeal. However, before picking a credit card that rewards you for paying on time, take a careful look at the terms. Here is a review of the two main credit cards that tie rewards to good credit behavior: the Citi Forward card and the Discover Motiva card.

Citi Forward
The Citi Forward card is a rewards credit card with a twist. Like other generic rewards cards, cardholders earn rewards points on each purchase. Cardholders get 5 Citi ThankYou points for every $1 spent on books, movies, music and restaurant meals, and 1 point per $1 spent on other purchases. New cardholders also get up to 8,500 bonus ThankYou points after making the first $250 in charges and signing up for paperless statements.

The card carries no annual fee and currently features a 0 percent intro APR on balance transfers for 12 months and a 0 percent APR on purchases for 7 months. The Citi Forward card is also available in a student version with similar benefits.

How this card rewards good behavior: According to Citi, the Citi Forward card was created after a survey of 1,000 consumers found that 76 percent would prefer to be rewarded for doing the right thing, rather than punished for making mistakes. Cardholders get 100 bonus ThankYou points each month they pay their credit card bill on time and don’t go over their credit limit. (Depending on how the points are redeemed, the cash value of the 100 bonus ThankYou points is 50 cents to $1 per month.)

In addition, cardholders can earn up to a 2 percent reduction in the interest charged on purchases. Every three billing periods, Citi will reduce the purchase APR by 0.25 percent if the cardholder pays the card on time, stays within the credit limit and uses the card to make at least one purchase. The purchase APR will be reduced to a maximum of 8 times for a total reduction of 2 percent on the purchase APR. The standard purchase APR on the Citi Forward card ranges from 12.99 to 21.99 percent, depending on an applicant’s creditworthiness.

The bottom line: With a 0.25 percent APR reduction every three months, it would take two years of on-time payments to get to the full 2 percent reduction in the purchase APR. While that’s certainly a benefit, cardholders with good credit would be better off applying for a credit card with a lower interest rate in the first place. Of course, the greatest interest savings is realized by simply paying off the balance in full each month.

Discover Motiva
Like the Citi Forward card, the Discover Motiva card is a basic rewards credit card with added rewards for good behavior. Cardholders earn up to 1 percent cash-back on standard purchases, and 5 to 20 percent cash-back when purchasing from retailers featured on Discover’s online shopping mall. The card currently comes with a 3.99 percent intro APR on balance transfers for 15 months and a 3.99 percent APR on purchases for 12 months. After that, the variable APR ranges from 11.99 to 20.99 percent, depending on an applicant’s creditworthiness.

How this card rewards good behavior: So far, the Discover Motiva card has rewarded cardholders by waiving one month’s interest charges after cardholders pay their bills on time for six billing periods in a row.

However, Discover recently announced that the company will phase in a new rewards structure. Going forward, cardholders will earn a Pay-on-Time bonus every month they pay at least the minimum amount due on time. In addition, the bonus will be lowered to a 5 percent reduction of the interest charges for that month. The changes will be phased in after May 1, 2011 and will be fully effective by April 1, 2012.

The bottom line: The new structure for the Pay-on-Time bonus on the Discover Motiva Card may sound like a good deal; but kick the tire and the card offers less value than before. Assuming an average balance of $1,000 and a 19.99 percent APR, the interest savings under the old program would be $16.67 after six months. With the new structure, savings would be about 83 cents a month for a grand total of $4.99 after six months. Not exactly what you’d characterize as a killer deal.

In addition, the cash-back bonus on the Motiva card starts at 0.25 percent and only turns into 1 percent cash-back after the cardholder makes $3,000 in purchases each year. Given the number of attractive rewards cards offers out there, anyone with decent credit should not find it hard to get better deals.

Cash rebates range from 1 percent to as high as 5 percent on some gas rebate cards. So at current gas prices, your savings could quickly turn into real money — particularly if you have a long commute.

Average national gas prices have more than doubled in the last two years, climbing from $1.60 per gallon at the end of 2008 to an average of $3.40 at the end of February. And with tensions in the Middle East continuing to flare, it could be only a matter of time before gas prices begin to flirt with the $4.00/gallon level again.

With gas prices at current levels, even rewards credit cards offering a bottom-rung rebate of 1 percent will shave 3.4 cents off each gallon of gas. However, if you play your cards right and get a high-rebate gas credit card, your savings could range from around 7 cents per gallon (for a 2 percent gas rebate card) to as much as 18 cents per gallon (for a 5 percent gas rebate card) each time you fuel up. Over the course of a year, this can quickly add up.

Gas credit cards fall into two categories: branded gas rebate cards issued in conjunction with gas companies (for example BP credit cards) and rewards credit cards with special gas rebates that are issued by traditional credit card issuers.

Branded gas credit cards tend to have slightly better rebates, but cardholders only get the rebate if they fill up at the gas stations affiliated with the company that issued the card. The purchase APR on branded gas credit cards also tends to be higher, so if you plan to carry a balance, a generic rewards credit card is often the better choice.

With that in mind, here are CreditCardGuide.com’s picks for the three best generic rewards credit cards for consumers who are looking to save money on gas:

1. The PenFed Visa Platinum Gas/Cash Rewards Card
The PenFed Visa Platinum Gas/Cash Rewards card excels in this category by offering a full 5 percent cash back on gas purchases paid at the pump. Unlike other rewards cards offering this level of a gas rebate, the rate is also offered year-round, and there is no ceiling on the amount of cash back earnings cardholders can accumulate. In addition, the card offers 1 percent cash back for other purchases. The PenFed cash rewards card has no annual fee, and the purchase APR is currently at 13.99 percent — which is in the lower range for rewards credit cards.

The downside? The card is not available to all consumers. To apply for the credit card, you have to have excellent credit and be a member of the Pentagon Federal Credit Union — which is not as difficult as it may sound. See the card description for more details on how to become a PenFed member.

2. The Capital One No Hassle Cash Rewards Card
The No Hassle Cash Rewards Card from Capital One is another good choice for people with excellent credit who are looking to get the most out of their savings. The card offers 2 percent cash back on gas station and grocery store purchases, and 1 percent cash back on other purchases. There is no ceiling on cash back earnings, and rewards earnings do not expire. Cash back earnings are easy to redeem either as a statement credit or a check; cardholders can even set up automatic redemption of cash back earnings. The card also carries no annual fee.

As an added bonus, the No Hassle Cash Rewards card currently features 0 percent APR on purchases for one year after opening the account. After the introductory period expires, the purchase APR will range between 12.9 and 20.9 percent.

3. The TrueEarnings Card from Costco and American Express
For consumers who shop at Costco, the TrueEarnings Card from Costco and American Express is also worth a look. The card is available only to Costco club members, and it carries no annual fee. Cardholders get 3 percent cash back on gas (up to $3,000 in gas purchases a year; 1 percent thereafter), as well as 3 percent cash back at restaurants, 2 percent cash back on travel and 1 percent cash back everywhere else. The also card features a 0 percent APR on purchases for the first six months, and, after that, it features a variable APR of 15.24 percent.

Rewards earnings are redeemable for merchandise or cash at any Costco Warehouse in the U.S. Cardholders receive a store coupon with the rewards earnings accumulated once a year. However, the coupon must be redeemed before the expiration date or rewards earnings will be lost.