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Apple has announced its first ever credit card, which should stiffen the competition in the credit card world when it becomes available this summer. The tech giant created the card in partnership with Goldman Sachs and MasterCard. Goldman functions as the card issuing bank while Mastercard connects card users to any establishment that’s within its network.
Not only is this a new step for Apple, it’s also a first for Goldman Sachs. The financial services giant is known more for investment services, but has moved into consumer savings accounts and loans with Marcus and has now decided to stick its toe into the credit card waters.
Enough of an introduction. Let’s look at the nitty gritty details of the Apple Card.
At a Glance
- Earn 1% to 3% cash back on all purchases
- APR: 13.24% to 24.24%
- Daily cash back rewards
- No international fees
- No annual fee
- Titanium Apple card
- Transactions linked to Apple Maps
Rewards
Earning Cash Back
You earn 3% cash back on Apple services and purchases of Apple products made through the Apple Store. Outside of that, Apple gives you 2% cash back for all other purchases made with the card through Apple Pay. If a business doesn’t have Apple Pay, then you’ll get 1% cash back with the titanium card. That’s a simple cash back reward system.
The cash back is unlimited. You’ll receive your cash back each day in the form of Daily Cash. The money will go into Apple Cash, a virtual cash account that launched a couple of years ago as Apple’s response to Venmo and PayPal. The money in the Cash account can go towards whatever you want.
Redeeming Cash Back
You can use the cash back in several ways.
- To make another purchase in Apple Pay
- Transfer money over to a family member or friend
- Apply that cash towards your Apple credit card bill
- Transfer the rewards to your bank account
Rewards Potential
Calculating potential rewards is easy. For those who pay virtually every expense with Apple Pay, the effective 2% cash back could plausibly generate $1,000 or more a year in rewards.
As an example, according to the Economic Policy Institute, a family of four in Fairfax, VA spends an average of $9,509 a month on everything from housing, to health care to taxes. Assuming 50% of these expenses can be charged to a credit card, the yearly total charged would equal $57,054.
At an effective 2% cash back rate for non-Apple purchases and if you stick to Apple Pay, a family of four would generate $1,141.08 in cash back rewards from the Apple credit card. For families who don’t use Apple Pay, but used the card for all those purchases, that figure would be cut in half– $570.54.
Titanium Card
This new addition to the Apple family comes in two forms. There’s a digital form in the Apple Wallet and a tangible titanium card for places that don’t accept Apple Pay.
The titanium card offers some unique security features. The titanium card only has your name on the front and a strip on the back. That’s it. There’s no card number or card verification code listed on the card. If you ever lose the card or start a tab at a bar, there’s no need to worry about a stranger collecting sensitive information.
Those numbers still exist, though. They are just located in your digital wallet.
Other Card Benefits
- Apple Card’s App: The digital form color-codes your transactions and then tracks the location of your purchase. Suspicious looking activity on your account? A quick tap and you can view the name of the establishment and where to find it in Apple Maps. Maybe you did make that purchase after all.
- Credit Card Late Fee Pass: $0 fee, but “additional interest” will accumulate
- Security: Each purchase requires approval through Touch ID or Face ID and your transaction history stays on the phone
- The Lost Card Service: You have the ability to freeze the card and order a new one
- Goldman Sachs Promise: The financial services firm says it won’t sell your data to another company for marketing or advertising.
- Apple Card Payoff Calculator: A calculator that helps card users estimate how much interest they will accrue by the payments they are thinking of submitting.
The Fine Print
- Annual Fee: $0
- Foreign Purchase Transaction fee $0
- Late Penalty: $0, but additional interest will accrue
- Returned Payment: $0
- 2% Cash Back: Only applies to purchases made with Apple Pay.
Pros & Cons
What we like
- Synchronization of the card with phone features like Apple Pay and Apple Maps
- Touch ID and Face ID transaction approval
- Unlimited cash back
- No fees
- Numberless titanium card
- Goldman Sach’s promise to not sell your data
- Provides additional ways to pay down balance
- Easy sign-up
What could be better
- “Additional interest” on late payments seems like penalty interest or a penalty fee
- The 2% cash back applies only to purchases made via Apple Pay
- No signup bonus
How it Stacks Up
The Apple Card offers a competitive APR and, for those who use Apple Pay, competitive cash back rewards. Cards like Citi Double Cash and Fidelity Visa offer 2% cash back on all purchases, not just those made via Apple Pay. But both have their own potential drawbacks. With Citi Double Cash, you have to wait for your 2% longer, since the reward is split up–it’s 1% on purchases and 1% when you pay for those purchases.In addition, you can’t redeem your Double Cash rewards until you’ve accumulated $25 worth of rewards. With Apple Card, its Daily Cash feature deposits your cash back automatically every day. As for the Fidelity Visa, to get this card you must have a Fidelity account.
The Apple Card offers other functional advantages. The card should effortlessly sync to the iPhone’s standard functions like Apple Wallet and Apple Maps. And within Apple Wallet, you get color-coded categories of your transactions along with the location of your purchase. Suspicious looking activity on your account? A quick tap and you can view the name of the establishment and where to find it in Apple Maps. Users can also see their transactions, the type of transactions and how those transactions look by day, week and month. It also gives users a level of security that other cards don’t have – the numberless credit card.
All in all, Apple Card’s combination of cash back rewards and integration with the Apple ecosystem makes it, for those who have iPhones, a worthy competitor in the cash back credit card space.
Is this the card for you?
This card is a reasonable option for people looking for an everyday credit card with simple rewards. On top of having no annual fee or foreign transaction fees, you get 2% cash back on any purchases made through Apple Pay and 1% for purchases through the titanium Apple card.
This card allows two ways for the cash back to be applied to the credit card’s bill. You could make it a statement credit. In addition to this, Apple offers a pay down calculator so you can estimate what your balance will be and the interest if you carry a balance into the next month.
Those pay down features are great for people who are proactive in paying their credit cards off. But I like that it allows you to think about the result if you decide not to pay it off every month.
This card is a good choice for iPhone users who place a high priority on convenience and security. For those who are entirely focused on maximizing rewards, there may be better options.
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