Is The Apple Credit Card Any Good?

Filed Under: Credit Cards
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For a while we’ve known Apple’s plans to launch a credit card, and today the full details of the card have been revealed, with the card expected to be available this summer.

To give a bit of a teaser, the card is exactly what I expected — it’s not great, though it has a couple of unique features, and I imagine the card will be very popular given Apple’s loyal following. Apple could start selling fax machines and people would be lining up for days to get their hands on one.

Details of the new Apple Card

Apple is emphasizing ease of use and privacy as the key features of the card. iPhone users will be able to apply directly from their phone, and receive a virtual card number immediately.

Beyond that, Apple will leverage their data systems to help categorize and label transactions, which they claim will lead to customers living a “healthier financial life” and being better able to understand their spending habits.

Apple Card rewards structure

Apple will be providing rewards in the form of cashback, which can be earned at the following rates:

  • 3% on all purchases made directly with Apple, including at Apple Stores, on the App Store and for Apple services
  • 2% when using the Apple Card with Apple Pay
  • 1% on physical card purchases made outside of Apple Pay

That’s a decent enough return on Apple and Apple Pay purchases, but there are plenty of rewards cards offering 2% back these days, so the rewards structure of the Apple Card isn’t that interesting to me.

Earn Cash Back Rewards

What makes the Apple Card different

While the Apple Card seems to fundamentally be a co-branded cashback card, there are a few intriguing differences.

Daily Cash

One of the selling features of the Apple Card is that rewards will post relatively “immediately.” This isn’t entirely unique — my Capital One miles usually show up in my account on the same day that I make a purchase — but there are still many issuers and programs that take at least a statement cycle to post.

What is interesting about the Apple Card is that the accumulated “Daily Cash” can not only be used for a statement credit (which is common), but because it is integrated with Apple Pay, cardholders will be able to use their cash rewards for other Apple Pay activities, including sending funds to other iPhone users through Messages.

I’m sure nothing could possibly end poorly with that functionality. 😉

Security, or hassle?

The Apple Card is obviously focused on mobile payments, and wants to encourage cardholders to use Apple Pay for all transactions.

For retailers that don’t offer Apple Pay, however, a physical card will still be produced. The card will apparently be made not just of metal, but “titanium,” and won’t have any account details on the card:

With no card number, CVV security code, expiration date or signature on the card, Apple Card is more secure than any other physical credit card.

As someone who seems to have their card data compromised fairly often, I appreciate the idea behind not having any account information on the physical card. From a security perspective, that seems smart.

But this is another feature that I see being potentially problematic in practice, as many cashiers are trained to match the last four digits of the physical card against the swipe-generated data. Still, given the paltry 1% return on purchases made outside of Apple Pay, this isn’t really a card I’d recommend using in those cases anyway.

No fees

Apple is advertising that the card will have no fees associated with it, including no annual fee, no late fees, no foreign transaction fees, and no over-the-limit fees. They say that their goal is also to provide interest rates that are among the lowest in the industry.

My take on the Apple Card

For someone willing to put a bit of effort into maximizing credit card rewards, I think there’s almost no reason to get this card. There are better cards out there in just about all categories (as I’ll outline below).

That being said, I have to give Apple credit for at least putting some thought into the card with the instant rewards, no late fees, no foreign transaction fees, and more.

If this card were being issued by anyone else, I can’t imagine it would be popular. However, Apple has a massive, loyal following, and I imagine this card will take the US by storm, simply because it’s made by Apple.

But there really isn’t anything unique here. It’s not like there aren’t other cards offering nearly instant rewards, and there are plenty of cards you can apply for directly on your iPhone, and there are lots of cards with no annual fees and even no foreign transaction fees.

Alternatives to the Apple Card

If you’re a savvy consumer, you’ll potentially be earning a lot more rewards with other cards. For one, the card’s 1% cashback on non-Apple/Apple Pay purchases simply isn’t competitive, as cards like the Citi® Double Cash Card offer 1% cash back on every purchase, and then an additional 1% cash back when you pay for those purchases. The card has no annual fee, so is an excellent option.

Otherwise, something like the Uber Visa Card offers 4% back on dining, 3% back on hotels and airfare, 2% back on online purchases, and 1% back on everything else, and has no foreign transaction fees and no annual fee.

Of course if you’re willing to get more than one credit card and are interested in travel rewards, there’s so much more value to be had. I consider the best credit card duo to be the Chase Sapphire Reserve® Card and Chase Freedom Unlimited®, as you’ll earn 3x points on dining and travel, and 1.5x points on all other purchases, with points being redeemable for 1.5 cents each towards the cost of a travel purchase.

Bottom line

Apple’s new co-branded credit card is more or less what I expected. It offers 3% cashback on Apple purchases, 2% cashback on Apple Pay purchases, and 1% cashback on all other purchases. It’s essentially a way to get you to spend more with Apple, and to increasingly use Apple Pay for purchases.

Then it offers some cool perks like instant rewards, no annual fee, no foreign transaction fees, and a cool card without any numbers on it.

When you consider that this card is being issued by Apple, I imagine it’s going to be very popular.

What do you make of Apple’s new credit card?

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Regarding Comments: The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.

Comments

  1. You ignored the most important part – the titanium physical card is one of the best looking cards available.

    Seems like a decent card option for Apple products, recurring iTunes bills, etc. No real reason not to get it.

  2. I wish them the best of luck. We won’t apply because the value offered through this card is less than any other card in our wallets.
    The security features don’t appear to be any better than any other ApplePay system, so I don’t value them. Sure,  won’t be scraping your data, but Goldman surely will.

    Eventually, the US will move away from the third-world card system currently in place, and as it becomes more like the civilized world Apple’s card will be moot.

  3. It’s a hard pass for me. I’m looking to keep my credit available to pick up a more lucrative card in the future. With the double cash card already in my wallet this isn’t compelling.

  4. Miss the days when Apple used to do things that were amazing. Another yawn for a company that used to elecit wows.

  5. @Steven

    Third world countries have way more developed world card system than the US, which seems forever stuck in time and prone to fraud.

  6. It doesn’t interest me. I can see how it could be a good card for young people and beginners who don’t yet understand how to use credit wisely, but I wonder if those type of customers will even be approved. As for the claim on the Apple website that “Apple Card completely rethinks everything about the credit card,” I just don’t see it.

  7. I’ll be curious to see how this impacts the co-branded Barclays card, which while not a great card in terms of rewards, often has promos for 12-18 month no interest financing for Apple store purchases.

  8. Anyone who has an Altitude Reserve and spends more than 3000 annually on mobile transactions comes out ahead of this new offering or any other card offering 2% back. I don’t see anything exciting here.

  9. Hilton Marriott Avis Hertz etcetc They usually ask me to.present card and they match it with last four digits on reservation. Will be interesting when someone shows this card 🙂

  10. As someone who lives abroad, no foreign transaction fees + 2% back on ApplePay is a really compelling proposition. Yes, CSR is great for dining out, flights and Ubers, but for day-to-day purchases (like the grocery store, fitness classes and cell phone bills), there’s no card offering the same.

  11. I live in Malta, my home loan bank (Which I get paid into) does not offer Credit cards. Effectively leaving my unable to get a credit card, all banks require income to be paid into them.

    If Apple Card is launched in Malta I Would get one as it would be the only option.

    They could certainly fill a niche, like Revolut has done for Debit cards.

  12. There is a potential danger to this new card, especially for those new to the world of credit. While the lack of late fees should be applauded, it may lull unsuspecting consumers to paying their bill whenever they feel like it, which I suspect will not be protected from having substantial negative impacts to credit scores.

  13. Answering your question. Nope. Anyone who would get it either should own stock in Apple or is a certifiable dipshit.

  14. 2x daily spending is good enough for many spending without nick and dime – I mean come on, for many people, miles mostly come from signing up anyway.
    And no hidden fees/less hassle to deal with customer service is highly underrated – Hit by it once and you’d appreciate it much more.

  15. “Apple could start selling fax machines and people would be lining up for days to get their hands on one.”

    So true! 😉

  16. So tell me how the Apple/Goldman card is going to help me fly for free?

    I don’t get it. This is simply a branding hype of Apple and does nothing to help us travel for free.

    Pick any Chase /Am-Ex/BofA card that get get me free travel.

    So what’s the advatange of the App card?

  17. “Not really” would’ve been a nice TLDR answer to the page header, but as you said it will probably get plenty of takers anyway, because apple.

  18. The real innovation is the mechanism of the credit card. Rather than applying, waiting to get approved and waiting a week or two for the physical card to arrive in the mail, you can start charging to the account immediately, both online and in person.

    If you lose your phone, your credit card information is secure since it can’t be accessed without biometrics and passwords. Your phone gets remotely wiped. You access your info from another device and all the information is repopulated for immediate use.
    If your card number itself is compromised, you can immediately be issued new details.

  19. I’ve been wondering what this card would offer. Not sure that cash back is for me. The data system they mention is not really that innovative – actually, it’s lame – lots of cards categorize spending today so their claim of living a “healthier financial life” is silly. I don’t get how they think this differentiates Apple. Same for the instant credit of awards, not new. I think this is just Apples attempt to cash in (pun intended) on the CC industry. After all, they have a huge fan base of loyal customers 🙂

  20. Brit on the move – it doesn’t differentiate Apple, but that doesn’t matter. Even within the comments on here you can see people falling for the hype merely because it’s Apple.

  21. I’m afraid that your joke on Apple selling fax machines might come to pass. The way Apple is regressing it might come to be.

  22. OMG
    There goes a new credit card debt record. Targeting people who has no clue how the credit system works.

    This could be revolutionary, as it is the beginning of the end. RIP US economy.

    The brainchild of MBAs in Apple. What to do with $250 billion in CASH, which by the way is more than Portugal’s GDP!!!!!!.
    Create a credit card and lend some cash out. That way our fanboys can buy 2 iPhones and a MacBook Pro instead of just buying a flip phone. In 6 months, we repo the Macs and charge 20% interests while refurb the repo Macs and sell them to the next sucker with less credit.

    Capitalism at it’s finest.

  23. No annual fee and no foreign transaction fee. That’s got to worth something. I am not sure there is any other annual fee-free card that does that.

  24. Apple is skimming all ApplePay purchases by certain percentage, no? Giving bonus spend on the category where company is making independent cash flow (huge one, at that) just reads as yet another Apple “advantage”: make sure customer is permanently locked into our monopoly with big barriers to try anything else. No wonder Apple fanatics are so fanatical… it is new religion of a sort, where questioning Apple-anything is met with “thou are heathen one”.

  25. Indeed, Apply Pay skims a portion of the transaction to Apple. That is probably why you only get 2% only when using Apple pay, but not using the physical card. Personally, Apple pay acceptance did not work very well for me, I use Samsung Pay because I can use the magnetic strip emulation when touch and pay doesn’t work.

  26. Typical Apple… Release something completely behind the times, have a major marketing blitz, and the sheeple will be lapping it up like it was the best thing ever.

    I’ve had my CC#s stolen many times, but all through merchant breaches, never through abuse of the physical card.

    @Quinn: Bullshit. There’s nothing new nor novel about this card. There’s plenty of credit cards out there which are instant, on-the-spot approval. I believe my Delta Amex was instant approval, with the final screen showing me the card #, CCV, expiration so I could use it immediately. I had no problem using it online and it worked fine with Samsung Pay, even in places which didn’t accept touch-free payments. Apple Pay still requires POS systems and readers be set up to work with it. When one of my Chase cards’ # was stolen, it automatically updated in the app, no waiting.

    As far as it being secure because it’s on the phone, I don’t think so. Stolen Apple/iTunes accounts are some of the most valuable on the black market because of the Apple Pay info stored within them and how easy it is to load on a phone.

  27. I second DC’s comment – utter rubbish. A card for the up and coming generations who know zilch about credit and interest…

  28. So much credit card fraud in a developed country? xD

    In India, you have to enter your pin in the pos machine to complete any swipe transaction. Online, a code is texted to your registered phone that you have to enter to finish the purchase.
    Sure it adds a couple of seconds, but the added security is much more important. Never suffered credit card fraud in India but a couple of times in the States.

    Also we mainly use Google Pay or Paytm for cashless which is easily authenticated by touch ID or a pin.
    Safety is the number 1 priority.
    When is Apple Pay going to come here?

  29. @Srujan Deshpande

    It’s people like you who scare the s*** out of me the most. Those who think they know about credit but they really don’t. You are a great example of Apple’s target group.

    In India you bank is adding you, the customer, more burden and complications to PROTECT THE BANK FROM FRAUD. If your card is illegally used who is responsible, you or your bank?
    Think carefully. All those PIN and 2FA is does it save your money or your bank’s money.

    Now for your “personal” bank account, you should have all those security to protect YOUR money.

    Not that you can change India’s system or anything, but just to remind you to think critically who is the system really protecting at whose expense.

    Like I said, Apple is targeting people with no clue, and you are case in point.

  30. The thing is, I’m not aware of any no annual fee credit cards with zero foreign transaction fee outside the US. I travel a lot and I’d welcome a free credit card that helps me avoid these fees but I doubt Apple credit card will be available globally .

  31. These days, Apple is kind of like Sony. Used to be awesome, but now just another tech company.

  32. “Apple could start selling fax machines and people would be lining up for days to get their hands on one.”

    Me: I am shocked — shocked, I say! — to find fax machines being sold here!

    Apple: Your fax machine, sir.

    Me: Thank you.

  33. @AlexS
    The ApplePay, Cash, Touch and FaceID security is housed in the secure chip of the iPhone/iPad or Mac, not in the iTunes/Apple account.

  34. “Stolen Apple/iTunes accounts are some of the most valuable on the black market because of the Apple Pay info stored within them and how easy it is to load on a phone.”
    Congrats on dumbest post of the week, AlexS

  35. @Eskimo know what you are talking. What @Srujan Deshpande said is a tried and tested system not only in India and Asian countries but also Europe.
    America did not even have the chip implemented until a couple of years back.
    That’s when we realized the mistake and asked for it.
    Even in Europe you need to enter pin when using chip based cards.

    We are either to lazy or dump to follow it and then choose to blame it on others who are doing it the right way to safeguards the interest of end users.

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