Apple unveiled its very first credit card on Monday, simply titled Apple Card. And while it shakes up Apple's own ecosystem, it's unlikely to shake up the credit card world as a whole.
The new card is meant to integrate seamlessly with the Apple Pay system, though there will be a slick physical card. It will be a Mastercard offering backed by Goldman Sachs. It will be available starting sometime in the summer of 2019.
And while it will no doubt appeal to the Apple loyalists and fanatics out there, it's not much different than any standard cashback credit card. Read on for more details on this upcoming no annual fee credit card.
The Basics of Apple Card Rewards
Apple is promoting this as a simple, no-nonsense rewards structure. And on that count, the tech giant is mostly right. Here's a look at how you'll earn cash back with this card.
- 3% cashback on any Apple purchases, including in the App Store or at physical Apple Store locations
- 2% cashback on all purchases made via Apple Pay
- 1% cashback on all other purchases
The kicker here is that Apple promises users will receive their Daily Cash rewards the same day a purchase is made. While not unheard of, most travel rewards cards take a few days minimum – if not the remainder of a monthlong statement period – for rewards to be deposited.
On the flipside, there's no promise of a welcome bonus for additional cash back after spending a certain amount on the card within three months of opening it. That's a bummer.
The Basics of the Apple Card
From computers to smartphones, Apple has always done things a little differently. So it's no surprise the same is true for their first credit card.
For starters, Apple is clearly emphasizing this as a digital product tied in with its Apple Pay platform. But there will still be a physical card. It just won't look like any other credit card.
That's right: No credit card number, front or back. No CVV code. No expiration date. No signature. Just your name and a chip on a flat white titanium card. Apple says this will make it “more secure than any other physical credit card.”
What's more, the card will have no annual fee and Apple says it will charge interest rates “that are among the lowest in the industry.” Apple also says it won't charge a flat fee for missed payments, and will simply tack on additional interest for the following month instead. Further, the card will have no cash-advance or foriegn transaction fees.
Our Analysis
Everything Apple does seems to make a splash, and this new credit card is no exception.
The card itself seems beautiful, and there's no denying that Apple's approach to this new market will appeal to the diehard fans out there. Because it's integrated with Apple's existing technology platforms, it should be easier to track spending for credit card users.
Yet there's no denying that compared to the rest of the market, this card will fall short of the competition for almost all users. Let's compare it with two of our favorite cash back credit cards in the market: The Chase Freedom and Chase Freedom Unlimited.
The Chase Freedom earns 5% cash back on a handful of categories that rotate every three months, and 1% on all other purchases. The Chase Freedom Unlimited, meanwhile, earns 1.5% cashback on every single purchase.
Better yet, the cashback from those cards can be converted to Chase Ultimate Rewards points so long as you hold one of the Chase Sapphire Preferred cards. In our opinion, that makes these cards a far stronger option than the new Apple card for most users.
Bottom Line
Apple made waves with this new credit card, and we think it will have broad appeal to many who already carry iPhones. At the end of the day, if you want a credit card that will earn travel rewards or cash back in different categories, there are going to be better options.
All photos courtesy of Apple