More credit cards coming with better rewards offers

Major retail chains and credit card issuers alike are boosting their rewards programs to draw consumers into taking on credit card debt with them, according to a report in the Dallas Morning News.

"Name a big chain and you'll find a discount deal," David Robertson, publisher of credit card industry publication The Nilson Report, told the newspaper. "Coming out of the recession, every retailer is holding a hat in hand with a discount."

For example, Target stores now offer consumers a 5 percent discount on all purchases made with its REDcard debit and credit accounts, and Toys R Us will soon add a 10 percent back offer to its loyalty program for purchases up to $500. Similarly, Chase Freedom cards give consumers 5 percent back on all purchases at department stores, supermarkets and movie theaters, up to $1,500, through December 31.

Some chains and lenders are even joining together to offer greater rewards, the report said. U.S. Bank and supermarket chain Kroger recently announced they would introduce a new program for their 1-2-3 Rewards MasterCard or other store-branded credit or debit accounts. Consumers will now earn points, which could be redeemed for free groceries, whenever they take on credit card debt at the supermarket.

Kroger, as well as other grocery store chains it owns, is also offering double points on all purchases made with its credit cards at their locations, and triple points for store-branded items, the report said.

However, the increase in this type of rewards card has had little bearing on the popularity of existing programs, such as airline miles, the Reuters report said. Accounts that give users free miles for every dollar of credit card debt they compile are particularly popular with higher-income consumers, and those who travel a lot for business. Typically, they still use these miles to upgrade their flights and perks.

Many consumers enroll in credit card programs that will give them rewards, but before doing so, it may be a good idea to research a number of comparable offers to determine which will give the best value of rewards per dollar of credit card debt.