The freebies can be meagre, and they can come at a big cost.

In Australia's crowded credit card market, plenty of cards are linked to reward programs. But according to ME Bank research, more than half of all reward card holders say that they're getting rewards worth less than $50 annually. Close to two out of five believe their card is costing them money, rather returning any value.

The first thing to be clear on is that reward cards come with high interest rates, often about 20 per cent.

Unless you pay off the balance in full every month, the interest charge can quickly wipe out the value of any rewards. And don't even get me started on annual fees.

The ME study also found one in three people don't understand how much value they're getting from their card. That's a worry, given many people only have a card in the hope of scoring rewards. The best way to know if you're getting decent value is to work out how many points it takes to get one dollar of reward.

Let's say you need 5000 points to get a free toaster. If the toaster normally sells for $50, it's going to cost you 100 points for each dollar of reward.

Maybe you could use 6000 points to get two free movie tickets normally costing $40 - that works out to 150 points per dollar of reward.

As the toaster calls for fewer points per dollar, it offers better value. But knowing this involves shopping around to work out the market value of your reward.

Perhaps the bigger worry with reward cards is the psychological impact they can have. We all love a freebie, and the prospect of rewards can entice us to spend more on the card chasing points.

If the bait of rewards is seeing you spend up big on your card, it's time to rethink the whole deal.