Personal finance
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The worst credit cards of 2012
Credit cards catch a lot of flak for being conduits to debt as well as charging high fees and interest rates, but the truth is, much of their negative reputation comes as a result of either irresponsible usage or a few bad offers.

Getting one of the worst credit cards of 2012, as identified by the credit card comparison website Card Hub, will not only cost you hundreds of dollars, it will also prevent you from taking advantage of the historically attractive offers that are currently on the market.

The particular card that's worst for you depends on your exact needs, so let's take a look at the offers to avoid in seven different major credit card categories.

Need: Rebuild credit
Card: First Premier Bank Gold Credit Card
Explanation: There's little differentiation among credit cards for people with bad credit, so your objective in choosing one should be to minimize costs. That certainly doesn't entail getting the First Premier Bank Gold Card, which has a 36% interest rate and charges a $95 processing fee prior to account opening, a $75 first-year annual fee and both a $45 annual fee and a $6.25 monthly fee beginning in the second year.

It's obviously a much better deal to opt for a secured credit card, which you can get by placing a $200 refundable security deposit and paying a $29 fee during the first year instead of $170.

Need: Maximize rewards
Card: Visa Black Card
Explanation: The Visa Black Card is essentially a poor attempt to capitalize on the social cache of American Express' Centurion Card, which is commonly referred to as the Black Card and is a status symbol among actors, musicians and athletes. In return for paying a $495 annual fee for the Visa Black Card, you'll only get one point per dollar spent, airport lounge acces, and concierge service.

According to Card Hub's Q3 Credit Card Landscape Report, the average rewards credit card offers 1.08 points per dollar spent or 0.98% cash back and doesn't charge an annual fee that even comes close to $495.

Need: Get the lowest possible APR for upcoming purchases
Card: Arvest Bank Classic Credit Card
Explanation: Offering a 4.9% introductory APR on new purchases for the first six months, this Arvest Bank credit card has the highest new purchase intro rate of all the cards that offer one and provides it for the shortest period of time. To put this in perspective, the best credit card for avoiding interest on upcoming big-ticket purchases, the Citi Diamond Preferred Card, not only gives you a 0% introductory rate, it provides it for a year longer than the Arvest Bank card offers 4.9%.

Need: Lower the cost of existing debt
Card: UBS Preferred Visa Signature Credit Card
Explanation: It's a bad time to market an obviously unattractive balance-transfer offer, as the balance-transfer market is currently dominated by the Slate Card from Chase, which gives you a 0% introductory balance-transfer APR for 15 months and charges neither a balance-transfer fee nor an annual fee. Forgoing that card in favor of the UBS Preferred Visa Signature Credit Card, which offers a 9.99% balance-transfer APR for six months and charges both a 3% balance-transfer fee and a $495 annual fee, would therefore be a very costly decision.

Using a credit card calculator, you'll find that the average household, which has roughly $6,700 in credit card debt, would waste more than $1,900 in fees and interest paying down debt over a 24-month period using the UBS card as opposed to the Slate Card from Chase.

Need (for students): Build credit and minimize costs
Card: U.S. Bank College Visa Credit Card
Explanation: Banks generally offer college students better credit card terms than their credit standing warrants because of their relatively high earning potential and the years of financial independence ahead of them. While you can therefore expect to get some decent rewards or a 0% introductory interest rate, the U.S. Bank College Visa Credit Card won't be the one providing either.

It doesn't provide rewards or low introductory rates of any kind, but what it does give you is the possibility of ending up with a 20.99% regular APR -- the highest rate of all the student credit cards we evaluated.

Need (for small-business owners): Maximize rewards
Card: U.S. Bank FlexPerks Select Rewards Visa Business Credit Card
Explanation: Small-business owners charge a lot more to their credit cards than the average consumer, and so they rightfully expect to garner some impressive rewards in return. That's historically been the case as well, with business credit cards typically offering some robust rewards earning rates, particularly in spending categories such as office supplies and telecommunications services.

The U.S. Bank FlexPerks Select Card bucks that trend, however, by offering 0.5 point per dollar spent, which is both far below average and at risk of being made even less valuable if U.S. Bank decides to increase the number of points required to redeem its perks.

Need (for small-business owners): Fund business operations
Card: Most of them
Explanation: The Credit CARD Act of 2009 doesn't apply to small-business credit cards, which means that the APR on your existing balances can change for no reason and at any time. Since it's difficult to manage a company under the constant threat of unexpectedly expensive debt and using a general consumer credit card won't increase your personal liability, it's best to use a 0% consumer card for your small-business funding needs.

It's important to note that certain issuers like Bank of America have proactively applied all of the CARD Act rules to their business credit cards, but limiting yourself to one issuer's products will make it hard to get the best rates.

At the end of the day, these offers may cause you to lose a bit of faith in credit cards, but make no mistake about it, there are still some great deals on the market right now. In addition to the aforementioned Citi Diamond Preferred Card and the Slate Card from Chase, which offer low introductory interest rates on new purchases and balance transfers, you could score a $500 initial bonus with the Chase Sapphire Preferred Card, 6% cash back at supermarkets with the Blue Cash Preferred Card from American Express, and a full 2% cash back with the Spark Cash for Business from Capital One.

In other words, there's as much upside in getting the best credit card as there is downside in getting one of the worst.

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