This was a great year for customers looking to get great value from credit cards without racking up debt. Since many consumers continued to live lean in the wake of the recession, credit card companies were obligated to provide more tantalizing deals. With this competition among issuers, we saw the return of some excellent 0 percent APR balance transfer offers, as well as some compelling sign-up bonuses on reward cards.
In part one of our editor's choice awards, we recognized our favorite cash back, airline and travel, low interest rate and balance transfer credit cards. Our editor's choice awards continue with some faithful favorites as well as a few surprises.
Best rewards credit cards
2012 saw some of the most aggressive signup bonuses we've seen for rewards credit cards in years. Some banks offered hundreds of dollars worth of rewards points for new cardholders, while others waived annual fees and extended teaser rates. These two cards stood out by offering real value far beyond their introductory periods:
- Chase Sapphire Preferred Card. Built upon Chase's already strong Ultimate Rewards platform, the Sapphire Preferred card piles on the perks for frequent flyers. Eliminating foreign transaction fees saves between 2 and 5 percent compared to typical travel reward cards. Rack up double points, a 7 percent annual premium, and a 20 percent discount when you book travel through Chase's website, and you've got one of the best values in the business.
- Citi Forward Card. This year, Citi supercharged a former "Most Innovative Card" winner, making it the perfect card for foodies and film buffs. With 5 points per dollar spent on dining and entertainment, you can score rewards fast. Paying your bill on time can help earn one of the lowest APRs among all rewards cards.
In both cases, cardholders who redeem their rewards points for merchandise or travel rewards can earn rebates a few percentage points higher than if they just requested cash. If you've got the patience to track points instead of pennies, these programs can help you keep more folding money in your wallet.
Best credit card for poor creditFor consumers still recovering from the recession, secured credit cards remain one of the only proven strategies for rebuilding a positive credit history. A handful of well-known credit card issuers have stamped their names on secured accounts that don't gouge their cardholders.
- USAA Secured Card. Available to military service professionals and their families, USAA's secured MasterCard and American Express accounts carry an APR lower than most unsecured credit cards.
- Wells Fargo Secured Card. While Wells Fargo's APR is about twice that of USAA's, the convenience of linking your security deposit to your existing checking and savings accounts makes this the most accessible secured card on the market.
Most innovative programBoth of this year's most innovative programs underscore the reasons why you'd want to use credit cards for your purchases instead of cash. Our winners have gone the extra mile to ensure that cardholders save as much money as possible, while treating them to top-notch customer service experiences.
- Citi Rewind. Though many credit cards offer price protection, Citi upped the ante by offering to help its customers track retail purchases. A clever web app available to Citi cardholders helps you register your big-ticket purchases, highlighting items whose prices have dropped more than $25 in the past 30 days. Just request the refund online, and Citi will take care of the usual hassle of getting a retailer to re-ring the purchase at the lower price.
- Discover it. Discover has won plenty of awards for its customer service over the past few years, and the original Discover Card helped define cash back credit cards as we now know them. But Discover it deserves some special attention for eliminating most of the fees commonplace with credit issuers. The Discover it card also puts the company's excellent call center agents in the spotlight, while streamlining Discover's cash back rewards program to match competition from Chase, Capital One, and American Express.
Most innovative CardIf Las Vegas took bets on these awards, we'd have a lot of angry bookies on our backs right now. We'd never have wagered that a prepaid debit card would take one of our top honors, but we couldn't have predicted how serious American Express would get about competing with traditional banks.
- Bluebird from American Express aims to replace your checking account while offering benefits better than many credit cards. You can deposit checks with a free smartphone app, set up direct deposit from your employer, pay bills online, and even add cash to your card from any Walmart checkout counter, all with no fees. You'll only pay a fee if you reload your Bluebird account from another bank's debit card, or if you use an out-of-network ATM.