I recently ran across an interesting article about reward credit cards over on CNN/Money. In it, the author argued that reward programs are often a bad deal for consumers because: (1) they encourage you to spend more money, (2) reward cards often have higher interest rates, and (3) it can be difficult to actually access and use your rewards. Some also carry annual fees (in my experience, this is most of true of frequent flyer mileage credit cards).
Honestly, I remain unconvinced that credit cards cause you to spend more. In some cases they do, but I’d be willing to bet that it varies on a case-by-case basis. By extension, I have a hard time believing that a reward credit card will induce you to spend more than a regular credit card.
As for having higher interest rates, the last thing you should be doing if you’re carrying a balance is worrying about rewards. If you have a balance, instead focus on taking advantage of one of the many 0% balance transfer credit card offers that are out there floating around.
The bottom line here is that, if you’re smart about how you use your reward credit cards, there’s a decent amount of cash rewards to be had.