Apple Card: What’s Useful and What’s Hype?
UPDATE June 15, 2020: This article was originally published on August 30, 2019 and has been updated to reflect the latest features on the map.
Apple praises its Recently launched Apple Card like another in a long line of innovation, claiming that it “completely rethinks everything about the credit card”. But that’s a bit of a stretch.
While the Apple Card has some compelling attributes, perhaps the most innovative thing about it is that it combines several hard-to-find – but not unprecedented – features in one package.
“We have to keep in mind that this is just a credit card,” says Brian Riley, director of credit counseling for Mercator Advisory Group, a payment and credit advisory group. the bank, by e-mail. Noting that the Apple card will compete with some well-established issuers, including Chase and American Express, he says it will be “a case study in loyalty. Will the masses follow Apple?”
If you’re tempted to take the Apple Card plunge, here’s how to separate useful features from the hype.
No, the Apple Card does not “completely rethink everything”
The Apple Card doesn’t innovate until it consolidates it.
Unlike many others cash back credit cards, this one is clearly designed for mobile users. In fact, the only way to apply for the Apple card is through an eligible iPhone, which is unique (although this is also a potential hurdle).
“As with all Apple products, there is indeed an elegance,” says Riley.
But virtually any credit card can be added to a mobile wallet and used in the same way.
The Apple Card encourages the use of a mobile wallet, earning the following rewards:
• Apple Pay purchases made directly from Apple (including Apple stores, the App Store, and for Apple services).
• Uber and Uber Eats purchases via Apple Pay.
• Walgreens and Duane Reade purchases via Apple Pay.
• T-Mobile in-store purchases via Apple Pay.
• Nike purchases via Apple Pay (in US stores, on Nike.com and on Nike apps).
• Purchases at Exxon and Mobil gas stations via Apple Pay. This includes fuel, car washes, and convenience store purchases.
• Panera purchases via Apple Pay.
All other purchases made through Apple Pay.
All purchases made with the physical Apple Card.
What about that “laser-engraved titanium” physical card, which you have to request separately? Apple went to great hilarious efforts to explain How to take care of it, but the best way to take care of it – and yourself – is simply not to carry it at all. Its reward rate is just not competitive today.
When it comes to fees, the Apple Card trumpets its absence – but you can find a number of refund cards that also don’t charge an annual fee or any over-the-limit costs, that have been missing for years. More interesting is the absence of foreign transaction fees or late fees on the Apple card. It’s harder (but not impossible) to find refund cards that don’t charge a fee for overseas purchases, and while other cards already waive late fees, these products usually don’t earn rewards.
So what’s new with the Apple card?
When it debuted in August 2019, the Apple Card was redesigned, meaning it opted out, offering a sign-up bonus, an introductory period of 0% APR or the possibility of ‘add authorized users, all of which are common characteristics of its competitors.
But the Apple Card brings some really fresh offers:
Check your credit limit and APR before committing to the card. If the card is approved, you can decide – based on the credit limit and APR you are offered – whether you want to accept the offer. Apple says you will have up to 30 days to make your decision and that “your credit rating is not affected until after you accept it.” Few other credit cards show you this information before draw your credit.
Access customer support by SMS 24/7. 24-hour customer service isn’t new, but having a conversation with the sender via SMS is new and great if you hate phone calls and long wait times. (You can also call through the iPhone Wallet app.)
Use Apple Maps to clarify your purchases. You can tap the individual charges you make with the map to locate that merchant’s location on your iPhone’s Apple Maps app.
And what is just rare or interesting?
The Apple Card also offers some features which, while not unheard of, are still nice to have and are not a given:
Instant access to your card after approval. Start shopping immediately, without having to wait days to receive a physical card in the mail. Instant access to credit is rare, but not new.
Ability to accumulate (and spend) rewards in real time. There is no minimum trade-in amount and no waiting until the end of the billing cycle to access your reserve. These features are welcome, but available elsewhere.
A billing cycle that is always at the end of the calendar month. Apple calls this a “common sense” payment schedule, and it can certainly make it easier to keep track of when your bill is due. But other issuers already allow you to set your own billing date.
Access to financial tools to help you break down and categorize your expenses. Useful, but available through many other credit cards and third-party sites, NerdWallet included.
Instant card replacement: If you think your Apple Card may have been compromised, you can generate a new card number and invalidate the old one, all in the Wallet app. This is nifty and can save time, but other cards offer a free overnight card replacement and / or the ability to “freeze” or “lock” a misplaced card.
The Apple Card claims to take security a step further, instituting additional privacy measures so Apple can’t tell where you shopped, what you bought, or how much you spent. (Apple notes that Goldman Sachs, on the other hand, has access to your data.)
Are its interest rates “among the lowest in the industry”?
When the Apple Card debuted in August 2019, Apple noted that it would have a variable APR of 12.99% to 23.99% depending on creditworthiness.
The bottom of this range is better than average – and better than many other cash back credit cards. But only those with excellent credit are likely to qualify for this rate.
It’s worth noting that the Apple Card app has some terrific visual incentives to help you understand how much credit card interest you can potentially earn if you don’t pay your bill in full each month. The “Choose Amount” dial turns from red to green as it displays an estimate of the interest you will pay, based on the payment amount you choose.
There is also a longer than average time Grace period which lasts until the end of that month’s billing cycle, rather than the typical 21-day window, giving you a little extra time to pay your bill before you start earning interest on your balance.
“Created by Apple, not by a bank”?
Apple obviously played an important role in the development of this product. But the card is still issued by Goldman Sachs, an investment bank. And it’s Goldman Sachs that will review your application, along with your credit scores, your credit report, and the income you declare on your application to decide if you will be approved for the card.
This type of subscription is standard for the vast majority of credit cards on the market. A handful of so called “alternative credit cards“can assess creditworthiness beyond credit scores and history, but the Apple Card is not one of them.