Mellody's Math: Frequent Flier Benefits

Credit Card Reward Refresher

Credit cards that earn rewards with every purchase are the hottest craze in the credit card industry today. According to Cardweb.com, approximately 40 percent of all bank credit cards have a rewards program affiliated with them. And given the sheer volume of the offers, in the hundred millions, and the accompanying fine print, it is often difficult to determine which programs are actually "rewarding." In fact, according to The Nilson Report, a payment systems newsletter, only 30 percent of credit card users have a rewards card with no annual fee.

The key to maximizing a rewards card is to read the fine print before signing up. While many cards offer an interest rate of zero percent for the first six months, it is important to find out what happens after this period has elapsed as the rates could increase dramatically. You also should find out how you redeem your rewards to ensure that the process is hassle-free with no additional costs attached and be sure to select a rewards card that actually suits your lifestyle and will be of use to you and your family. Most importantly, regardless of the card you choose, only spend what you can afford to pay off each month. It does not pay to earn free airline ticket or $50 cash-back if the end result means you are in debt.

Mellody Hobson, president of Ariel Capital Management (arielmutualfunds.com) in Chicago, is "Good Morning America's" personal finance expert. Ariel associates Matthew Yale and Aimee Daley contributed to this report.