What if you could get a credit card that was totally fee-free: no annual fee, no fees for late payments, cash advances, balance transfers, or exceeding your credit limit? And what if that card offered three reward points for every dollar you charged (triple the industry standard) and a decent interest rate to boot?

Sound like a dream? Commerce Bank, a regional bank based in Cherry Hill, N.J., known for aggressive tactics, rolled out such a card for its banking customers in August.

Commerce's card could catch on with other issuers. But don't count on it. Fees and penalties are a vital part of fat industry profits.

While top credit card issuers probably won't be rushing to match Commerce's deal, an explosion of rebate and reward cards designed to keep people charging means now may be a good time to reconsider what's in your wallet to make sure you're getting the best deal.

An estimated 60 percent of credit cards are tied to some kind of reward, according to Comperemedia, which tracks direct mail offerings.

Typically, every dollar you charge on the cards earns points redeemable for merchandise, airline tickets, hotel rooms, gasoline or simply cash to spend however you like. The more you spend, the more you get, although many cards carry a cap.

Consumers hanging on to plain vanilla cards are missing out.

These enticing offers are intended to encourage a loyal clientele, instead of attracting interest-rate focused cardholders who often switch cards while chasing the best deal.

In addition, reward cardholders tend to rack up big bills, generating more income in the form of interchange fees that card companies collect from retailers (typically 2 to 3 percent of the purchase.) That helps card issuers make up for the interest charges they lose on the 40 percent of cardholders who pay their balances in full each month.

Making a wise decision

With the mind-numbing assortment of reward cards to choose from -- there literally are thousands -- how do you pick the best one?

The first thing to keep in mind is that you don't want a card that costs you more than the giveback is worth.

That can happen if you are among the roughly 60 percent of cardholders who carry a revolving balance each month.

Interest rates on reward cards generally are higher than on plain Jane cards, so what the card company gives with one hand, it takes back even more with the other in the form of added interest charges.

"If you carry a balance, forget about the rebate or reward programs and focus on a card that offers the lowest possible interest rate," Greg McBride, financial analyst at Bankrate.com, said flatly.

By ignoring reward cards, people who carry a balance also will avoid the added temptation to overspend, piling on the interest costs.

"These cards can be so alluring in terms of getting caught up in earning a bigger and bigger rebate," said Curtis Arnold, founder of Cardratings.com. "You have to use them with discipline."

Internet sites, such as Cardratings.com, Bankrate.com, CardWeb.com and others, compile lists and phone numbers of national credit card issuers and provide search engines to help consumers identify the best low-rate and reward offers.

Be aware that although the sites offer their own ratings and analysis, they accept fees from card issuers to have their cards prominently displayed.

At Cardratings.com, for example, "featured" cards are listed first. To go directly to a complete listing, visit www.cardratings.com\formfr.html.

The card that's right for you

If you've settled on finding a reward card, evaluate how much you plan to charge each month and look for a card that matches your habits, Mr. McBride of Bankrate.com said.

If you charge a lot for groceries and gasoline, for example, you'll want one of the newer cards, such as the Chase Cash Plus Rewards Visa, which offers 5 percent cash back for grocery, drugstore and gasoline purchases (five times the industry standard) and the standard 1 percent on everything else.

If you're a big spender, you may want to consider a card with a tiered rate that offers a fatter rebate once you reach a certain spending level.

The Blue Cash card from American Express, for example, earns 1.5 percent cash back on all purchases and 5 percent on groceries and certain other purchases once you spend at least $6,500. (Below $6,500 you earn 1 percent on certain purchases and .5 percent on everything else.)

If you charge $50,000 a year (roughly $4,200 a month), you would earn at least $685 cash back with the Amex card (you would earn more, for example, if you buy lots of groceries) vs. $500 on cards offering a straight 1 percent back.

Overall, cash-back cards offer the advantage of flexibility. After all, everyone can use cash. But taking your reward in the form of merchandise can give you more bang for the buck.

Take one of the most popular reward cards, the GM MasterCard, which pays cardholders at the hefty rate of 5 percent on all purchases, good for rebates on the purchase or lease of GM vehicles.

"Sometimes cards issued by a merchant make the most sense for you because generally they give more aggressive rebates," Mr. Arnold said. "If you're loyal to a particular retailer, often times their own cards are hard to beat."

Obviously, though, you'll want to pick a card that offers rewards you can use. No sense signing up for the GM card if you're wedded to Fords.

Neither Mr. Arnold nor Mr. McBride are big fans of airline reward cards, which let you accumulate points for free flights.

For one thing, unlike other types of cards, the airline cards typically charge annual fees, which eat away at the value of your reward.

In addition, capacity controls, black-out dates, redemption fees and other restrictions can make redeeming points a hassle.

Generic bank-issued cards that earn tickets on any airline generally have more flexible terms, lower annual fees or none at all, and may be a better bet than airline-branded cards. But the big disadvantage is they don't let you combine card miles with miles you earn flying.

Read the fine print

As with any card, be sure to read all the terms of your agreement. Be sure you know how long a low introductory interest rate will last, for example, and what fees may be imposed and how to avoid them.

And be sure to pay your bills on time. If you don't, besides being hit with a late fee, you could trigger a punitive interest rate of 25 percent or more.

Even people with perfect payment records can get zapped. That's because more card issuers are inserting universal default clauses in their card agreements, allowing them to jack up your rate if you've been delinquent paying other bills, such as your mortgage or car loan.

Also be aware that card issuers can change the rules with as little as 15 days notice. That means your "fixed" interest rate can change, or your reward program end abruptly.

You also should know that card companies offering the best rewards and lowest interest rates may have strict credit requirements. If you don't meet the application criteria, they could end up sending you a different card with less favorable terms.

Once you've chosen a card, don't let it sit in your wallet forever. Be on the prowl for better deals.

"The market is so competitive and new offers are coming out literally on a daily basis," Mr. Arnold said. "You need to come back once a year and see what's out there."