Two of this week’s credit card news blogs have explored the world of plastic using the excellent comScore Online Credit Card Report, which was published on Apr. 19. Today, we wind up that exploration with a look at rewards programs.

Credit card rewards important

People are pretty smart when it comes to choosing their credit cards. Or, at least, they give pretty smart answers when researchers ask them to list the criteria they use to pick their plastic.

When comScore asked a sample of consumers who already had at least one card to rank card features, their top-three responses were:

1. Low credit card rates–40 percent
2. No annual fee–28 percent
3. Rewards or points–13 percent

Low credit card rates often more important

So far, so good. But a more detailed analysis of comScore’s data reveals a less smart attitude on the part of many consumers. A whopping 71 percent of people who keep a balance on their credit cards also have a rewards program on their primary card.

Suddenly, that whole “something for nothing” view of rewards looks less savvy. Today, according to this website’s credit card rates monitor, the average annual percentage rate (APR) charged on balances on consumer rewards cards is 17.48 percent. The same APR for consumer non-rewards cards is 15.27 percent.

Now, it may be possible for those who carry forward only a small amount of credit card debt each month to come out ahead if they take full advantage of a particularly generous rewards program.

However, generally speaking, many consumers with continuing credit card debt are better off switching to one of the many low interest credit cards available. Use this site’s credit card calculators to see whether you should switch or stay.

Credit card rewards: the different flavors

People who say that credit card rewards are important to them are very clear about the sorts of rewards they like best. When comScore asked them to rank (on a 1-6 scale) the most important types, they said:

1. Cash back–57 percent
2. Merchant rewards–13 percent
3. Flexible points–13 percent
4. Airlines–10 percent
5. Gas–5 percent
6. Charitable donations–3 percent

Household income plays a big part in these preferences. Cash back remains by far the most popular choice across all levels, but those with higher incomes are significantly more likely to value airlines rewards than the less well-off. Only 6 percent of those with household incomes in the $40,000-$74,000 range favor these, compared with 15 percent of those who earn $75,000 or more.

Intriguingly, it is those in the middle income range ($40,000-$74,000) who are stingiest over charitable donations. Only 1 percent of respondents in this group ranked the charity category highly, compared with 3 percent of those with higher incomes. Amazingly, a full 5 percent of those earning less than $40,000 prioritized donations. Make of that what you will.

Published 04/30/11 (Modified 03/25/13)