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For fliers annoyed by checked baggage fees and $3 in-flight Snickers, the airlines are touting a solution: Their branded, frequent flier credit cards, which now offer fee waivers and other perks, along with mileage rewards. But like everything else the airlines offer, these benefits also come with a price.

Once relics of the credit card industry, airline rewards cards are back. In the third quarter of 2010, rewards cards offering points or miles including those for airlines--accounted for roughly 40% of the 1.2 billion credit card offers issuers sent to consumers during the third quarter of 2010, up from 30% a year earlier, according to Mintel Comperemedia. The carrot: bigger benefits. Delta (DAL) began offering its cardholders a first checked bag free in May, saving $25 apiece for the cardholder and up to nine traveling companions, for example, and the 2011 sign-up bonuses for Continental cards range from 30,000 to 50,000 miles -- enough for at least one, or maybe two round-trip domestic flights. And Southwest (LUV), which debuts new cards March 1, will offer fliers the unique opportunity to trade in their points at lower rates to take advantage of fare sales (so a $100 fare-sale ticket would cost 6,000 points instead of 10,000).

The pitch seems to be working. Chris Kelly, a spokeswoman for Delta, said the number of applicants spiked after the carrier introduced its free-checked-bag benefit. JetBlue applications increased on par with a 30% increase in overall frequent flier numbers since November 2009, when the carrier updated its rewards program to eliminate expiration dates and change the earnings system to award points per dollar spent rather than by flight length, says Caroline Ramsey, the manager of marketing partnerships. Even industry skeptics are intrigued. "I've always been critical of airline cards, but I'm changing my tune a little," says Curtis Arnold, the founder of CardRatings.com.

In the past, airline-affiliated credit cards were harder to appreciate. Hefty annual fees and higher-than-average interest rates ate into already low-value miles. As a result, they were only a good bet for customers who paid their bills every month, charged more than $10,000 a year enough at the usual mile-per-dollar-spent to at least offset the annual fee and flew often enough to stack those mileage earnings with points in order to snag an elusive reward ticket.

But now, for some travelers, the new benefits can translate to real savings. Cards from Delta and Continental that waive the first checked bag fee for the cardholder and anyone he's traveling with would save a family of four $200 in fees on one round-trip flight. Do that two or three times a year, and it's a savings that more than makes up for the annual fee ($95 for Delta, $85 for Continental; both waive the fee for the first year). And airlines are increasingly offering cardholders reduced rates on in-flight entertainment and meals, such as $2 off the $6 DirecTV charge on a Continental flight, says George Hobica, the founder of deal-site Airfarewatchdog.com.

This makes the new breed of airline card a solid choice for many people but not everyone, says Arnold. The old drawbacks remain. High interest rates -- on average, 13.83%, compared with the 11.45% for non-rewards cards -- continue to make them expensive for anyone who can't pay off the balance in full each month. And every co-branded card carries an annual fee, typically between $60 and $450, although many are waived during the first year.

The miles themselves also have questionable value, says David Robertson, the publisher of payment industry newsletter The Nilson Report. Airlines have consistently reduced the value of miles and limited the number of available rewards seats, making rewards harder to redeem. The new enhancements waiving and reducing fees are a way to placate fliers frustrated because it's so much harder to get a free ticket, Robertson says.

Even spokesmen from American Express, Chase and Citibank, all of which issue airline-branded cards, agree that an airline card isn't always the right fit. For travelers who, for price or convenience can't easily stick to one carrier, a generic travel rewards card like Chase Sapphire or Blue Sky Preferred from American Express -- may be a better fit. "If you don't live near an American Airlines hub, it's probably not the right card for you," says Terry O'Neil, an executive vice president at Citibank, which issues the American Airlines AAdvantage card. And for travelers who carry a balance, a low-interest rate card will always be a better ticket.