Credit card rewards: Upon further inspection ...

I'm a credit card rewards evangelist. I use credit cards for most transactions and pay my balance in full each month. For the convenience of not needing cash and the trouble of reading through a lot of fine print, I earn cash, free oil changes and gift cards to restaurants and clothing stores. When I get a chance, I share the good word with others.

While credit card reward programs are far from perfect, they can stretch your dollar and help insert some fun money into a tight budget in these times of ever-higher food and fuel prices. About 85 percent of households carry one or more rewards cards, according to Consumer Reports.

But they're only worthwhile if --and it's a big if -- you don't carry a balance. If you typically do, focus on finding the lowest interest rate and then paying down that balance.

That said, a trio of studies about reward cards did make me question my faith.

This week, Bankrate.com and Consumer Reports released studies. Consumer Reports determined that few programs are worth the effort, blaming "increasingly complex rules, restrictions and limits on how much consumers can earn." If you are in the market for a card that yields rewards, the report suggests finding a flexible cash-back card that reflects your shopping habits.

Bankrate.com focused its research on the popular category of cash-back credit cards. The main pitfalls of cash-back rewards: Caps that reduce payouts for big spenders and tiered cards that result in modest spenders earning smaller amounts than promoted. The survey goes on to evaluate cards based on rebate redemption, introductory bonuses and cash-back differences by spending type.

For me, the most eye-opening research was conducted by Adam Levitin, a Georgetown law professor who also blogs about credit card industry issues at www.CreditSlips.org. Published in the winter edition of Harvard's Journal on Legislation, Levitin explained how credit card rewards are ultimately paid for on the backs of low-income Americans.

Retailers take such fees into consideration when they price their goods, but they don't charge a person paying with credit more or give a discount to someone using cash, despite profiting less when someone pays using a credit card rather than cash.

"Consumers with the most expensive payment options -- such as American Express Centurion and Black cards, Visa Signature cards or MasterCard Elite cards, which are only available to the most credit-worthy consumers -- will always receive the greatest subsidization. Meanwhile, customers using the cheapest payment systems -- typically cash and food-stamp consumers -- will always pay the most to subsidize other consumers' payment choices," Levitin explains.

Though a reward card user himself, Levitin proposes that Congress step in to allow merchants to levy a surcharge for credit users. On Thursday, the Senate introduced its version of a House bill that aims to create credit card fee transparency. Another idea is to give reward card programs the ax in fairness to consumers who don't use the programs and to merchants who bear a part of the cost for the restaurant gift card that should arrive in my mailbox any day now.

I already try to either use cash at mom-and-pop shops or ask about their preferred payment type, but Levitin certainly shared a side of my beloved reward cards that I've never before considered.