More than 173 million Americans had credit cards in 2006, and that number is expected to increase to 181 million this year, according to the U.S. Census Bureau.
With the increasingly difficult economy, people are using their credit cards more and more, and studies have shown that most people participate in a credit card rewards program. Those programs may carry rewards for airline miles, cash back, retail discounts, shopping points or variety of other benefits.
Hobson said consumers should make sure their cards' rewards are easily redeemed, and they should pick a card with a program whose rewards will suit them.
She also advised that consumers get only one reward card -- and only if that consumer is a disciplined shopper and pays off his or her balance on time. According to credit.com, having a rewards program attached to a credit card doubles the amount of spending on that card.
Hobson also said rewards cards are usually reserved for people with good to excellent credit, and interest rates are usually higher for rewards cards that for regular cards. According to creditcards.com, this week the average national credit card annual percentage rate of interest is 13.17 percent, compared with 13.47 percent for a rewards card and 14.17 percent for an airline miles card.
Hobson gave her top picks for rewards cards, in the following categories:
Hobson's Pick for Overall Rewards Card
American Express Green Card.
Hobson loves the card because it's a charge card -- which means the balance must be paid off in full every month, preventing consumers from getting debt way beyond their ability to pay. Consumers who are late on their payments may be assessed a late fee ranging from $35 or 2.99 percent of their total balance, whichever is greater. The late payment fee varies from state to state.
The one downside of the card is that it carries a $95 annual fee, she added.
The card also has a good membership rewards program. Members can earn one point for every dollar they spend, double points for travel booked through American Express Travel and triple points at more than 200 retailers at bonuspointsmall.com
Cardholders may also transfer points to 20 different frequent flyer programs, get extended warranties and travel protection, and use points to make donations to good causes, such as Haiti earthquake relief. Many other credit cards may also be used to make donations to charity.
Hobson's Pick for Airline Mileage Rewards Card
Hobson recommended Miles by Discover. The card has a variable APR starting as low as 11.99 percent, and there is no annual fee.
Cardholders get one mile for every dollar that is spent, and earn double miles for certain travel and restaurant purchases, up to $3,000.
Hobson also recommended the Capital One Visa No Hassles Miles reward Visa card. The APR is 13.9 percent, there is no annual fee and no blackout dates, there is no limit to how many miles may be earned per year and the miles accrued may be redeemed on any airline.