One problem with iCloud is once you delete a contact, it's gone for good. I wish that iCloud kept a copy of deleted contacts like Dropbox.
But you cane use Dropbox to save copies of your Contacts database. Make a symbolic link from your address book data to Dropbox. IF you accidentally delete that contact, go hunting in Dropbox.
Launch Terminal, type cd ~/Dropbox , then type:
ln -s /Users/username/Library/Application\ Support/AddressBook
where "username" is your user name.
If you ever accidentally delete a contact, you can go to the Dropbox website and find older versions of your Contacts database.
[kirkmc adds: Obviously, this hint is useful only for those who don't use Time Machine. But it also suggests a way to store backups of other key files.
In the AddressBook folder, you'll find the entire Contacts database (AddressBook-v22.abcddb), which you can restore, but, while it may include contacts you've deleted, it might not have new contacts you've added. There's also a Metadata folder, which contains cards for your contacts, which are used when you search with Spotlight. You can browse through these cards and, if you find a contact you've lost, double-click it to add it to Contacts.]
Mac OS X Hints