The credit card business is a competitive one. It is also a very profitable one and the combination of the two explains why you seem to find a pre-approved application in the mailbox just about every day. A new customer is worth a lot to the companies that issue credit cards; most consumers will spend thousands of dollars in interest during the time they carry the card.

Because the business is so competitive, many card issuers offer various bonuses and incentives to help them acquire and keep customers. These incentives may include frequent flier miles, discounts on baseball tickets, cash back bonuses and more. For someone who has an interest in the particular type of bonus offered, these cards may offer a better value than another card of the same type. But consumers would be wise to remember that these bonuses are not offered out of kindness, they are offered in the expectation that you, the consumer, will pay the company far more than the bonuses are worth in interest. There is no such thing as a "free" bonus; the companies expect you to pay for them.

The average American household has nineteen credit and debit cards and debt that exceeds $9000. With that kind of debt, most consumers are clearly not paying their bills in full each month. And by not paying in full, they are paying a great deal of interest, as most bank cards carry interest rates that range from 10-30% per year. The "free" bonuses are funded out of the millions of dollars in interest that are paid by consumers who don't pay in full.

On the other hand, if you are a savvy consumer, you can take advantage of these freebies by carefully shopping for a card that has bonuses that suit your needs. You can then use the card carefully by remembering to pay the bill in full each month in order to avoid paying more in interest than the bonuses are worth.

Some types of bonuses include: