A credit card is just a credit card until you take all those flashy sign-up bonuses into account. Bonuses add new meaning to earning rewards. Consumers can't wait to get them and credit card companies use them to differentiate their offerings.

Creditors claim to have it all; except debt repayment plans and reduced interest rates. They promise vacation getaways and large bonus cheques, but those rewards come with strings attached. Sign-up bonuses are just their newest ploy to get you to spend more money.

Once you're lured by the potential rewards, creditors hope that you'll carry over your balance and forget to cash in your bonus so they could slap you with high interest charges.

Fortunately, you can beat the system and capitalize on sign-up bonuses. It all starts with separating fact from fiction. So here are the top five myths surrounding credit card sign-up bonuses.

You're getting something for nothing

Credit card companies spend a lot of money to earn your business. But the money they spend to offer those great sign-up bonuses are not acts of generosity; they'll cost someone in the long run. It's up to you to determine who pays.

For instance, there are spending requirements that you have to meet before you receive the bonus. If you rack up debt and carry over the balance, you'll be forced to pay high interest charges. Depending on your balance and rate, your interest charges will pretty much exceed the cost of any bonus you receive. The only way you'll get something for nothing is to meet the spending requirements without going into debt and paying interest charges.

Applying for credit card hurts your credit score

Several factors are considered in the calculation of your credit score. A credit card helps your score by building your credit history and decreasing your credit utilization (debt to credit ratio). Some financial experts recommend that consumers carry at least six credit cards in order to build a stable financial profile. But since opening many cards in a short time can hurt your score, it's best to apply for the cards over time, and certainly not before you apply for a mortgage.

Keep your credit card debt to a minimum and pay your bills on time. Those factors are way more valuable than having too many credit cards.

You'll be stuck paying annual fees

Expect to pay an annual fee of £35-£95 for your rewards credit card. The good news is that most creditors waive the fee for the first year. This will give you the chance to claim the bonuses without extra charges - you can cancel the card just before the next year's fee becomes due. Alternatively, you can ask your provider to waive the annual fee. They may be willing to consider your request if you've been a responsible cardholder.

When comparing rewards credit cards, look for cards with no annual fees or cards where the benefits exceed the cost of the fee. It's the only way to ensure that your bonus points are truly rewarding.

The process is too complicated

Applying for a rewards credit card and earning bonus points couldn't be any easier. The Internet simplifies the process and places all the tools at your fingertips. Use consumer focused comparison sites to compare offers and find the best deals. Most sites provide details of the card's terms and conditions, so you can evaluate the terms and submit your application online.

Activate the card, meet the spending requirements and wait for your bonuses. Don't forget to pay off your balance, and decide how and when you'll use the card in future.

Sign-up bonuses are for everyone

Sign-up bonuses are fantastic, but they're not for everyone. If you're paying interest on credit card debt, your focus should be on paying off your debt, not on earning rewards from another card. Pay off your debt and reward your efforts with sign-up bonuses after you've cleared your balance.

Make credit cards work for you

Credit cards are powerful but complex financial tools, and you shouldn't fall victim to popular myths when you're making a crucial financial decision.

Understand the myths, use trusted sources to learn the truth, and make reward sign-up bonuses work for you.