Buzz
After today's Apple event, we now know more about Apple’s upcoming credit card, in partnership with Goldman Sachs. If you were expecting a game-changing rewards card, this one may not meet those hopes.
Here are the key features of the Apple Card, some of which were initially reported by the Wall Street Journal before today’s official announcement:
Apple Card users who make purchases using Apple Pay will earn 2% back on all purchases, and 3% back on Apple products. Using the physical card earns you 1% back.
Cash back is provided through the ‘Daily Cash’ program, which makes rewards available on your Apple Cash card daily—faster than your typical card, if you use Apple Pay.
Integrated with Apple Wallet, allowing users to manage the card on their iPhone. You can sign up for it directly via Apple Wallet.
There are no fees: No annual fees, foreign transaction fees, or late fees, and no penalty interest rate.
The card “encourages” users to reduce interest payments by showing them how much extra they will owe if they don’t pay off their balance.
The physical card is made of titanium and doesn’t display a card number, CVV, expiration date, or signature.
Additional Features
The Apple Card sets itself apart in a few key ways. Being integrated into your Apple Wallet and smartphone, it offers a comprehensive view of your spending, much like having Mint or another budgeting app built into your device.
“Apple Card uses machine learning and Apple Maps to automatically label transactions with merchant names and locations,” Apple explains. “Purchases are then totaled and categorized by color-coded groups like Food & Drinks, Shopping, and Entertainment.” It also provides spending summaries.
Perhaps most significantly, it promotes itself as “fee-free.” According to Apple’s website:
Apple Card has no associated fees: no annual fees, late fees, international fees, or over-the-limit charges. Its goal is to offer some of the lowest interest rates in the industry, and if a customer misses a payment, they won’t be penalized with a higher interest rate.
However, as Ted Rossman, industry analyst at CreditCards.com, points out, “The ‘no fees’ claim isn’t as unique as it sounds.” “Other cards like the PenFed Promise Visa and the Citi Simplicity also market this feature.”
The Apple Card’s interest rates are tied to the prime rate and can vary depending on the user’s credit profile.
Drawbacks and Other Alternatives
While the Apple Card offers some appealing perks, overall it’s just an average rewards card. The main downside is that you need to use it with Apple Pay to maximize your rewards.
“If you frequently shop at small, local stores or places that don’t support Apple Pay, you’ll only earn one percent back on your purchase,” says Sara Rathner, credit card expert at NerdWallet. And that’s easily outpaced by other no-fee rewards cards,” as I mentioned earlier:
Other rewards cards currently offer two percent back on most purchases, such as the Citi Double Cash.
The Wells Fargo Cash Wise card
gives cardholders 1.5 percent back on all purchases, while the
Capital One Savor card
* offers four percent back on dining, two percent on groceries, and one percent on everything else.
The Citi Double Cash card stands out by offering two percent back on all purchases, not just Apple Pay transactions. However, it’s worth noting that you earn one percent when you swipe and another one percent when you pay, rather than receiving the full two percent at once.
“Honestly, I’m not impressed. This card will make a lot of noise, but it’s more bark than bite,” says Rossman. “People will sign up for it, mostly because of their love for Apple, not because this card outshines others already available.”
As Rossman points out, this card isn’t even the best option for Apple Pay rewards. “If you’re looking to maximize your Apple Pay rewards, the U.S. Bank Altitude Reserve Visa Infinite card earns three points per dollar on mobile wallet spending—equivalent to three percent cash back or 4.5 percent on travel,” he explains.
Update 3:50 p.m.: This post has been updated with details regarding the card’s interest rate.
Correction 3/26: This post has been updated to clarify that the Savor card offers four percent back on dining, not three percent.
