Carrying a cash-back card is like having a rich uncle in the credit-card business. You never have to pay full price for anything that you charge. For every sweater, computer, or Big Mac you buy, you get money back, usually in the form of a check or gift certificate. And these days cash rebates are bigger than ever.

You used to get a 1 percent rebate across the board. But since Citibank upped the ante a couple of years ago with a card offering a full 5 percent cash back on some purchases, other issuers have followed suit, says Curtis Arnold, the founder of U.S. Citizens for Fair Credit Card Terms Inc., a group that rates credit cards.

Cash-back cards can look particularly tempting if you’ve been stockpiling points on frequent-flyer cards--points that are getting tougher to redeem. Even mileage cards that advertise no blackout dates or other restrictions are making airline rewards less rewarding. Capital One’s No Hassles card, for example, typically used to multiply the price of the ticket by 90 to calculate the cardholder’s reward points. A cardholder earning 1 point for every dollar charged could cash in 18,000 points for a $200 flight. Under rules that went into effect in November 2005, cardholders now have to relinquish 35,000 points for the same flight.

Cash-back cards come with some of the same drawbacks as regular credit cards, plus a few unique to the breed. For example, there are some new reward programs that say they’ll help you save money while you charge, such as Bank of America’s heavily advertised Keep the Change program. It boasts that it will help you save by rounding-up the charges you put on the card to the nearest dollar and sweeping the extra bit into a savings account at the end of each day. You charge a $3.49 latte, the bank will put 51 cents into your savings account. What the ads neglect to mention is that you could have saved lots more elsewhere because the savings account paid a measly 0.5 percent interest in March, when other banks offered 4 percent.

	Cash-back cards are a good choice if:
		You pay your bills in full each month. If you carry balances, your cash-back rewards can easily get wiped away by finance charges. And reward cards charge higher rates than other cards. Reward cards with the lowest annual percentage rates charge about 1 percent more than do standard cards with the best rates, according to Bankrate.com, which provides free information on bank savings and loans. So say you sign up for a card with a 14.5 percent APR. If you carry a $5,000 balance, make the minimum payments, and never charge another penny, you’ll pay more than $600 in interest in just the first 12 months. The annual cash-back perk, however, may be no more than $300--a common annual cap for most purchases. You frequent the stores with the highest rebates. Rewards are more generous, often up to 5 percent, if you charge at stores specified by the plan. But you don’t want to change your shopping habits to suit your new card. If, for example, you save an average of 10 percent on your food bill at the local grocery store, why shop at a pricier grocery store so that you can earn 5 percent back? Many cards reserve their most-generous cash-back offers for everyday purchases at grocery stores, drugstores, and gas stations. Warehouse clubs like Costco and giant discount stores like Wal-Mart and Target are often not included. You’re ready to dump your mileage-award card. Unless you’re a frequent traveler, you’re probably better off with a card that gives you cash back rather than mileage points. One reason: high annual fees. Say you charge $8,500 a year on an airline card. It would take you about three years to earn a domestic round-trip ticket, assuming you must earn 25,000 miles. During those three years, you could easily have spent more than $250 in annual fees. About that amount could have bought you a round-trip ticket from New York to Los Angeles on American Airlines in March 2006. You could have pocketed $425 if you spent the same $8,500 on purchases that earn 5 percent cash back through Discover’s Platinum Card. Like most cash-back cards, it does not charge an annual fee.

Here are some tips on how to get the most money from cash-back cards while avoiding the pitfalls. (For a list of the best ones, see The credit cards that pay you big-time.)

Make sure the big rewards aren’t restricted to purchases at stores you never visit. Before you sign up for a card, check the terms and conditions to see how much cash you can get back and if you are required to shop at certain stores or businesses to redeem your rewards. “Zero in on cards that give you the most-generous rewards for shopping at your usual spots,” says Greg McBride, a senior analyst at Bankrate.com. You can compare dozens of credit-card offers on Bankrate’s Web site (www.bankrate.com). The “Rewards Cards” link lists the cards’ fees. “More Information” allows you to review basic rules of the reward programs.

Another Web source that may help you compare card offers is the previously mentioned Cardratings.com, run by U.S. Citizens for Fair Credit Card Terms Inc. The site rates about 500 reward cards.

Watch out for the fine print. Like any other credit card, the reward variety comes with the usual nasty late-payment penalties (as high as $39 a month), as well as shrinking grace periods (as short as 20 days) and lofty default rates (30 percent or higher). They also have some twists of their own, including the fact that you often have to request your rebate to get it. Generally, the credit-card firms do not automatically send you a check or gift certificate or credit your account.

You’ll find the gotchas on the terms-and-conditions page attached to online and paper applications. Make sure that you understand the application completely before you submit it.

Decipher the card’s point system--it may not be what it seems. Some cash-back cards promise 5 reward points for every dollar you spend--which is not necessarily 5 percent cash back. But how many points you have to earn to get a dollar into your pocket is one item that may be missing from the terms-and-conditions page. If necessary, call the issuer’s toll-free number to learn the details before you apply. Generally, those 5 points translate to less than 1 percent cash back.

Look into your reward payment options. Go for cards that let you pick the way you’ll receive your reward--check, gift certificate, or gift card, for example--rather than programs that limit your choices. Some cards provide only store gift certificates or restrict you to cash toward the purchase of products offered by one company, such as the GM MasterCard, which gives you credit to buy a new General Motors vehicle.

Crunch the numbers. Cards that pay you cash back at the highest rate may have relatively low annual caps of, say, $300--which can add up to well below 1 percent cash back if you charge many thousands of dollars a year on your card. Other cards that pay cash back at a lower rate or have rate tiers (the more you spend, the more you earn) may have no annual ceiling. Figure out how much you typically charge to determine which type of card will benefit you the most.

Be sure to figure out when your annual rebate limit kicks in and when your points expire. Some cards base your rebate on what you charge between Jan. 1 and Dec. 31. Others count one year from the date you were approved for the card. And most cards give you 36 months from the time the points were earned to redeem the reward. If you don’t request your reward, however, it disappears.

Be on the lookout for limited cash-back rates. A card may offer a high rebate, but when you read the fine print you may find it only applies to purchases within a set time frame, such as the first 30, 60, or 90 days. Then the rebate will probably drastically decrease. Another card may be a better long-term choice.

Keep up on program switcheroos. Card issuers reserve the right to change the cash-back agreement at any time. Be aware that the deal you sign up for today may evaporate next month. To keep up with sudden changes, read all those annoying enclosures that come in the mail with your bill every month.