Beware Fine Print with Credit Card Rewards

It's harder now for credit card issuers to hit consumers with high fees and penalties, in the wake of changes in federal law.

So, says CBS News Correspondent Business and Economics Correspondent Rebecca Jarvis, they're trying other routes to recoup some of that money - including putting more conditions on the rewards they offer with many of their cards, such as cash rebates and airline miles.

Bottom line: Read the fine print! It's buyer beware.

To sweeten credit card offers that come with annual fees, issuers are increasingly promising richer cash rebates, airline miles and other rewards. But what isn't advertised is that the banks can strip away those rewards for any number of reasons. And hidden fees and blackout dates that can sneak up on you.

Reward cards can be a good option, but they're not for everyone. When should you consider applying for one of these cards?

Reward cards are great, but generally, if you carry a balance, reward cards aren't the best option, because they usually come with a higher interest rate. If you pay off your balance every month, it's definitely worth looking into a rewards card.

Although the rewards are out there, sometimes they can be a little tricky to understand.

Credit card companies are trying to entice you to go with them, but most have some kind of catch, so read the offer closely before signing up. The biggest thing to look out for before you put your John Hancock on the dotted line is "membership fees" or "annual fees" -- many of these rewards cards charge you something for participating. So, if you're going to sign up, be certain beforehand that you'll spend enough to outweigh the annual costs. For example, if the card fee is $50, you need to be certain you'll spend enough to get at least $51 back in rewards. How can you do that? Read the fine print, understand the fees, then look at your old credit card bill. Did you spend enough last year to get whatever deal they're offering you in the year ahead? If you can say "yes," then it may be the card for you.

Also note: Don't kid yourself into over-spending just to get the rewards.

What are some of the most common ways that people lose their rewards?

While all cards are different, there's usually a catch regarding when you redeem points. In many cases, points will expire after a certain amount of time, so be clear with your credit card company about when you must redeem them by. Beyond talking to the issuer and looking at the agreement, double-check your balance frequently to make sure the points are adding up.

Pay your bill on-time. If you're not up-to-date on your credit card payments, you won't be able to get the points. Some companies even charge a reinstatement fee. Amex, for instance, charges $29 to reinstate after a late payment. Discover, will cancel your points if you don't pay balance for two months.

And if you're going to cancel a card, be sure to redeem your rewards beforehand.

Only about a quarter of eligible cardholders say they redeemed points in the past year, so what are some ways people can maximize their points?

If you're sitting on a bunch of rewards that are about to expire, see if you can transfer them to friends and family. Sometimes, there's a fee to do that, so double check.

Many rewards programs will let you donate points or miles. But they're generally not tax deductable, because they are considered rebates.

The last option is pretty cool: You can actually barter your rewards. Points.com lets members of participating programs swap points or miles. The site is dominated by airline programs. There's no sign-up fee. But there's a transfer fee of a cent-per-mile-traded.