Everyone wants something for free and businesses cleverly exploit that desire with rewards programs, offering regular customers everything from a free night's stay in a hotel to a free pizza. But Consumer Reportssays its review of rewards programs finds reaping real savings can be tough.

Consumers complain frequently to ConsumerAffairs.com about every imaginable problem with rewards programs. Take Joseph of Vacaville, Calif. He bought a washing machine from Best Buy, only to have his son--who lives 500 miles away--call to say that Best Buy was trying to deliver a washing machine to him.

"Everytime I buy something the information is wrong," Joseph complained. "I have not received rewards in over a year which I was getting on a regular basis until these problems starting happening."

Consumers frequently buy products or services based on rewards card promises that never come through. That's what happened to Michael of Seymour, Conn., who agreed to add AT&T's DSL service to his account based on a promise of a $50 credit to his phone bill and a $50 credit on a Visa rewards card.

"About 2 weeks later I received a letter saying my phone choice will cause my bill to go to $79 a month. I called and the rep assured me $50 a month. Two months later I received my first phone bill for $149. The $50 credit on the account appears on my bill but is NOT applied to any charges, they won't adjust the bill ... and I cant get my reward card. They said it got lost in the mail," Michael said.

About 85 percent of U.S. households participate in at least one rewards program. A recent poll of Consumer Reports Money Adviser subscribers found that 41 percent of the newsletter's subscribers carried three to five such membership cards, nine percent had six to nine of them, and 3 percent somehow found room on their key rings or in their wallet for 10 or more.

Dizzying number

Consumer Reports finds that along with the dizzying number of programs have come increasingly complex rules, restrictions, and limits on how much consumers can earn--making many of the programs not worth the bother.

"Carrying the right cards and ignoring the rest can save you a little money on your purchases, but consumers must choose programs that compliment their spending habits," said Amanda Walker, senior project editor at Consumer Reports.

Some rewards cards do double duty as credit cards. Cash-back, gas, and grocery rewards credit cards can offer some relief for costly essential items, but often carry higher Annual Percentage Rates than traditional credit cards. Looking at some of the more generous credit card rewards programs, CR found that rates varied from 9.74 percent to as much as 19.99 percent.

"If the rates are high, the cost to carry a balance will often erase any savings the rewards program may offer," Walker said.

What to do

There are ways to come out ahead with rewards programs and Consumer Reports offers the following advice:

Consider where you shop. Save your key ring or wallet space for cards that will earn rewards at stores you use most often.

Project your spending. Translate the amount you're likely to spend into cash back or points, depending on the program. If it's points, find out how many you need to get something you might want. If you're using a credit card, subtract the annual fee, if any. If that calculation shows you'd have to spend a fortune to earn a pittance in rewards, you might want to use another card.

Favor cash back. You might never redeem your points, so at least you will get something. Plus cash-back cards tend to be more generous in their rewards, CR's research has found.

Skip credit if you carry a balance. Rewards credit cards often charge relatively high interest rates, which will eat up your reward if you carry a revolving balance. The issuer can also hold points hostage or stop adding to them if your payment is late.

Do the math on do-good programs. Cards that give your reward to a charity usually pay only about 25 to 50 cents for every $100 you spend. And you can't write off the donation on your taxes. Both you and the charity might do better if you use a more generous rewards card, keep the money, and just write the charity a check.

Use airline miles fast. Cashing in frequent-flyer rewards has become more difficult because airlines have cut flights and now have fewer seats available. So rack them up and use them up as quickly as possible. Airlines also change their rules frequently, and several big carriers have recently gone bankrupt.

Avoid temptation. Research has shown that people who use rewards cards charge more. It's easy to overspend just to earn a new digital camera or set of golf clubs.

Business cards

The "use it fast" advice applies to more than just airline awards. Credit card awards can vanish in no time, as Marianne of Rockaway, N.J., learned.

"I closed my Citibank credit card last month. It turns out that I closed it within a few hours of my statement closing date. Because of that, I missed out on over $200 cash in rewards," she told ConsumerAffairs.com.

"I called Customer Service and was advised that I could not recoup my rewards for the statement. I asked to reinstate my card so that I could get these rewards returned to me and was told this is not an option. I was highly dissatisfied with this entire situation," she said.

Perhaps the most notorious rewards program at the moment is the one offered to unwary customers by Vistaprint.

"I ordered business cards through VistaPrint for my new business last April," said Mia of Brunswick, Ga. "In trying to rectify a strange charge on my account today, my husband noticed a charge for $14.95 for the VP Rewards program. He asked me about it, thinking it was a charge for a playgroup for our kids. Nope. Vistaprint. ... Once we went looking, he realized this charge had been occurring every month since May of 2007."