But at the supermarket, I used our new MBNA World Points MasterCard (800-421-2110). This card offers a 5 percent cash rebate at grocery stores, drugstores, restaurants and hardware stores through Dec. 31, on top of the customary points, one per dollar spent.
We are sure we are not the only ones doing this. Increasingly, credit card issuers are adding rewards that include enhanced ''instant rebate'' and cash-back offers. In a trend that began in December and has accelerated this year, Americans are now more likely to receive a credit card offer with a rewards program than without, according to MINTEL's Comperemedia, a company that tracks trends in direct-mail and print advertising.
''With [credit card] issuers fighting for the same pool of people, offers need to stand out and deliver something to the consumer other than convenience,'' said Susan Wolfe, the company's vice president of research. Cash back is by far the most popular perk, with about 90 percent of the reward cards offering it.
The upshot is that disciplined consumers can reap meaningful savings by choosing which card they use to pay for what. Year to date, we have cashed in rebates totaling $207 from our three cards.
But these reward offers also have a down side.
''If handled appropriately, free reward offers can be fun and profitable,'' said Paul
Richard, executive director of the nonprofit Institute of Consumer Financial Education in San Diego. ''But people who start 'collecting' cards can find they eventually hurt their credit score.''
That's because, in determining whether a consumer will be approved for a loan and at what interest rate, lenders look at the person's total available credit. If you have accumulated half a dozen reward cards, a lender will assume you may max out all of them and may deny you additional credit when you really need it.
In general, the Institute recommends carrying no more than two credit cards.
Consumers also risk overspending and buying things they can't afford when they use plastic rather than cash. The reward cards, with their tempting offers screaming Buy Now!
Just take the letter we got from MBNA, enticing us to use free ''access checks'' linked to our MasterCard.
''If you've been putting off that special weekend getaway, you just ran out of excuses,'' the letter said. ''These access checks give you the flexibility and freedom to go where you want or buy what you want - right now!''
Buried in the fine print was the explanation that using the checks was the same as drawing a cash advance, subject to a 3 percent transaction fee plus interest, and without any grace period. Naturally, we shredded the access checks.
''If you are a wise consumer, you can get all sorts of advantages and incentives from reward cards,'' said Jessica Cecere, president of Consumer Credit Counseling Service of Palm Beach County, Fla. ''The bad news is that using credit for everything can put you into debt in a big hurry if you are racking up charges beyond what you can pay.''
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Humberto Cruz can be reached at AskHumberto@aol. com or c/o Tribune Media Services, 435 N. Michigan Ave., Suite 1500, Chicago, Ill. 60611.
