(MONEY Magazine) – If you blithely assume that each item you charge on a credit card helps you rack up fat cash rebates or valuable frequent-flier miles, you may be in for a disappointment. Reason: Because savvy consumers have learned to maximize rebates by charging everything from doctor's bills to college tuition--and then paying their bills in full to avoid finance fees--card companies have begun scaling back their freebies. (For a look at other ways card sponsors are squeezing customers, see "Avoid the New Credit Penalties" in MONEY's November issue.)

In November, for example, Old Kent Financial Corp. canceled its popular MasterCard and Visa Card Miles programs, which had allowed cardholders to fly free to any city in the U.S. after accumulating only 20,000 miles, 5,000 fewer than most airline rebate deals require. And two months earlier General Motors announced that it would slash the maximum rebate GM Gold MasterCard holders could earn toward the purchase or lease of a GM car or truck from $7,000 to just $3,500.

Card sponsors are also re-designing their rebate plans to entice you to run a monthly tab. That's because revolvers (who on average pay upwards of 17% in annual interest on a monthly balance of $1,950) generate far more profit for the card companies than the 36% of cardholders who pay their bills in full. "You'll see more card issuers rewarding people for not paying off their balance," says Anne Morgan Moore, president of Atlanta market research firm Synergistics Research. In the fall, for example, First USA launched a program that lets Visa and MasterCard customers who charge at least one item a month earn one point toward a vacation package and other goodies for every $10 of their monthly balance, including charges carried over from the previous month.

So what can you do to come out ahead if your card company shrinks the benefits? Unfortunately, you are largely at the mercy of the card sponsor. Issuers are not required by federal law to tell you in advance of changes in a rebate program, nor are they obligated to honor points or miles you've already accumulated. In practice, though, sponsors typically do notify cardholders in writing before altering their plans. And to date, companies are letting customers at least keep the benefits they've already earned. For example, GM Gold MasterCard customers who had already piled up rebates beyond the new $3,500 ceiling will still be able to cash them in.

Beyond remaining alert to cutbacks, you should choose a card that matches your payment habits. If you usually carry a monthly balance, ignore frequent-flier points and rebates and, instead, shop around for the lowest interest rate you can find. Says Ruth Susswein, executive director of Bankcard Holders of America: "Interest charges typically wipe out the value of rebates or frequent-flier points." (For cards with the best rates, see the table on page 35.)

Only if you pay off your bill each month should you pick your plastic on the basis of rebates. And even though many card companies are getting stingier, you can still find generous deals. So check out Bankcard Holders of America's Rebate/Frequent Flyer Credit Card Cost-Benefit Guide (524 Branch Dr., Salem, Va. 24153; $5 check or money order), which provides details on the rebate plans of about 40 cards. --Andrea Rock