Best Credit Cards for 2012 (by Category)

What makes a credit card a Top Card? Many factors go into determining what makes a credit card exceptional, and the Top Cards here combine the characteristics below in a way that separates them from the pack.

Competitive interest rates

The lower your interest rate, the less money you pay each month on your balance. So cards with competitively low interest rates are more attractive. Keep in mind that credit cards generally have an APR for purchases, balance transfers and cash advances. The APR for each of these might be the same or different. One APR for all three is the least complicated and easiest to remember. Credit cards also have a penalty, or default, APR that takes effect when you miss a payment, make a late payment or exceed your credit limit. The penalty APR can raise your finance charges significantly over the standard rate.

APRs may also be fixed or variable. Fixed APRs are typically more desirable since they aren't susceptible to the sudden rate increases that are possible with variable APRs.

Many credit cards feature a 0% introductory APR on purchases or a zero percent or a low APR on balance transfers. The draw with these cards is they can help you pay down your credit card debt from one or more cards by lifting the burden of interest for a period of time.

Minimal fees

The fewer fees associated with your credit card, the better. When you choose a card with fewer fees, it means less money out of your pocket--sometimes much less. The types and amounts of fees vary from card to card. Most cards have penalty fees, but not all have application, annual or setup fees. Sometimes card companies will waive one or more fees for a period of time. Potential fees include:

• Application fees: For processing an account application
• Annual/membership fees: For ownership over a period of time
• Setup fees: For opening a new account
• Late payment fees: For past-due payments
• Cash advance fees: For using the card to get cash
• Balance transfer fees: For moving your balance between cards
• Over-the-limit fees: For exceeding your credit limit
• Credit limit increase fees: For getting a higher credit limit

Attractive rewards

If you use your credit card to pay for purchases and bills, you might as well get some perks for doing so. That's where reward cards come in. With these popular cards, you may earn cash back on all purchases or for purchasing certain products like gasoline, office supplies, auto repairs or spending at specific places. You may rack up air miles and redeemable points for travel-related expenses--vacations, car rental, hotel stays and more--along with other goods and services. With so many choices of rewards programs, you can likely find one that's ideal for your spending habits and the type of rewards you want. You can really benefit from these rewards cards--so long as you don't overspend for the sake of the rewards.

A good fit

The way a credit card meets your individual needs is what makes it a Top Card for you. Cards are tailored to distinct groups of people and their financial needs and lifestyles. The Top Cards category features credit cards for students, small business owners, individuals with bad credit, gas cards for people who drive often, cash back cards for shoppers, air miles and points cards for frequent fliers and balance transfer cards for people who need a break on interest to pay down a debt. Finding the credit card that best suits you is a simple matter of doing your homework.