It all started superbly for the visitors, who took an early lead thanks to captain Mile Jedinak, but they were pegged back by Craig Noone's close range shot before the break.
And in a poor second half for Ian Holloway's men, they conceded to Aron Gunnarsson's powerful header on 73 minutes to throw away at least point.
With Damien Delaney suspended, Danny Gabbidon came in for his first Palace start against his former club, while Dean Moxey began at left-back and Jonathan Parr switched to right-back in place of the injured Joel Ward.
The Eages got off to a fantastic start after just four minutes when Jedinak lost his marker in the box and fired home Owen Garvan's corner from 12-yards out after good work from Yannick Bolasie to win the set-piece initially.
Malky Mackay's side mustered their first chance of the match after 17 minutes when former Brighton & Hove Albion winger Noone fired wide from the edge of the box, but the visitors should have doubled their lead midway through the half on three separate occasions.
First, Glenn Murray found himself through on goal after Parr's clearance, but the striker's first touch let him down and allowed goalkeeper David Marshall to collect.
Then Wilfried Zaha cut in from the left, dinked past two defenders and curled an effort towards top corner but struck the crossbar, while Garvan was denied by Marshall after curling a free-kick over the Cardiff wall.
Craig Bellamy was then denied an equaliser after finding himself through on goal but Peter Ramage got back to put the frontman off for a corner.
Referee Gibbs seemed to frustrate both sides throughout the half with some strange decisions, which saw both Zaha and Bolasie receive bookings, while Cardiff's next chance fell to Jordan Mutch from outside the box, but the midfielder shot woefully wide.
However, the hosts were back on level terms a minute before the break when Bellamy beat Parr down the left and cut the ball back for Noone to smash the ball home past Julian Speroni.
Murray blazed an effort over inside the box as the Eagles looked for an instant response, while the final action of the first period fell to Jedinak, who curled a free-kick over the wall but Marshall held well.
Bellamy should have put Cardiff in front just before the hour mark but he was foiled by Speroni from close range, while the Welshman went close soon after by hitting the post, only to be flagged offside.
Zaha thought he should have had a penalty minutes later after beating his marker, while Bolasie dragged a scissor kick wide from inside the box after getting ahead of Hudson.
Cardiff substitute Aron Gunnarsson sent a header wide from a Peter Whittingham free-kick midway through the second period, but the attacking midfielder made amends shortly after when he headed home from a corner to put Mackay's side in front.
Parr then went into the book for a late foul on Noone, while Andre Moritz entered the fray with 15 minutes to go for Bolasie, who was walking a tightrope from his earlier booking.
Whittingham nearly added a third after 78 minutes when he clipped the top of the crossbar direct from a free-kick, while Kagisho Dikgacoi entered the referee's notebook for dissent.
Palace battled for an equaliser but they had hardly deserved it after a poor second half showing, summed up by Gabbidon's wasterful shot over the bar from way outside the box with five minutes remaining.
Jermaine Easter came on for Parr in a bid to get something out of the game, but Cardiff were comfortable in the end and probably deserved to take all three points, but only just based on their second half performance.
The Eagles travel to Nottingham Forest on Saturday.
Palace: Speroni, Parr (Easter 87), Moxey, Gabbidon, Ramage, Dikgacoi, Jedinak (c), Garvan, Bolasie (Moritz 74), Zaha, Murray.
Subs Not Used: Price, Martin, O'Keefe, Williams, Appiah.
Attendance: 26,098
By Croydon Advertiser Sports Reporter Mark Ritson