Yes, it does not hurt if some merchants want to give me more cashback rewards for shopping, but I doubt a normal consumer should spend time to pick the right card to use for the most rewards for every niche retailer. It would be too time-consuming.

Faced with ferocious competition, credit-card companies are making their loyalty-rewards programs more flexible for customers and are getting merchants to help fund the costly perks.

The financial institutions that issue credit cards are tweaking their programs more frequently than ever, developing new types of benefits and offering promotions tied to the most basic of activities -- from filling the gas tank to buying back-to-school supplies. American Express Co. and Citigroup Inc. are scaling back some attractive promotions that were tied to a wide range of small purchases, and shifting to reward customers who use their cards at different types of merchants, such as specific clothing retailers and cable companies.

The latest twist comes today, when J.P. Morgan Chase & Co., one of the nation's largest issuers of plastic, plans to announce a new credit card that allows customers to switch back and forth between reward currencies -- either cash or points redeemable for a wide variety of goods and services. The card, named "Freedom," also will dole out a hefty triple reward -- either 3% in cash or triple points -- for purchases at certain merchants, including Dunkin Donuts and 7-Eleven. The card doesn't carry an annual fee and gives customers an assortment of other benefits for using the card for small purchases.

"Consumers really want to be in control of their rewards so you've got to be much more flexible," says Doug Filak, senior vice president of marketing for J.P. Morgan's card unit.