Should Anyone Get An Apple Credit Card?

Photo: Drew Angerer/Getty Images

Today, Apple officially announced the launch of its own credit card range in partnership with Goldman Sachs. The card is set to be paired with new Apple Wallet features that will allow cardholders to “set spending goals, track their rewards and manage their balances.” But should anybody sign up?

Note: Apple has not yet announced plans to release the Apple Card outside the US. If/when the card launches in Australia, its offerings are likely to be very similar.

The Apple card, which uses Mastercard’s payment network, will offer two per cent back on “most” purchases, in line with rewards cards currently offered by other financial institutions, and bigger discounts on Apple products.

Here are the main features of the Apple Card, first reported by the Wall Street Journal well before today’s announcement:

  • Users who use Apple Card with Apple Pay will get two per cent back on all purchases, and three per cent back on all Apple purchases. If you use the physical card, you get one per cent back.

  • That cash back is available as “Daily Cash,” a program that makes your cash back available on your Apple Cash card each day — quicker than your standard card, assuming you use Apple Pay.

  • It is built into Apple Wallet, meaning you can manage your card on your iPhone, if you’re into that kind of thing. You can sign up for it via Apple Wallet.

  • There are no fees: No annual fee, foreign transactions fees or late fees are charged, plus no penalty interest rate is applied.

  • It “encourages” customers to pay less interest, which is Apple-speak for “the app shows you how much more money you will owe in interest if you don’t pay off your balance.”

  • The physical card is titanium, and will not display a card number, CVV security code, expiration date or signature.

The Apple card does differentiate itself in a few ways. Because it’s integrated into your Apple wallet/smart phone, it can give you a holistic look at your spending, almost like it has Mint or another budgeting app built in.

“Apple Card uses machine learning and Apple Maps to clearly label transactions with merchant names and locations,” Apple notes. “Purchases are automatically totaled and organised by colour-coded categories such as Food and Drinks, Shopping and Entertainment.” It will also provide spending overviews.

It also bills itself as “fee free.”

Arielle O’Shea, personal finance expert at NerdWallet, says the partnership shows Goldman Sachs is trying to attract millennial clients to grow its consumer base. But that doesn’t mean that the card is necessarily the best pick for that generation.

“Given that millennials tend to most value experiences and travel, they may continue to be attracted to travel rewards cards despite Apple’s powerful brand,” O’Shea writes in an email. “Even the biggest Apple fans shouldn’t blindly turn to this card: It’s important to compare annual fees and features when shopping for a new card, and make sure the card fits your spending habits.”

So should you buy the Apple Card? Unless you're fully mired in the Apple ecosystem, the rewards really aren't that compelling. There are other rewards cards that currently offer two per cent back on most purchases, for instance.

You can use a sites like Moneysmart to research the pros and cons of rewards cards. Just remember to read the fine print, check for any fees and make sure your credit score hasn’t taken a hit lately. Rewards cards tend to require higher scores for approval.


Comments

    Apple has a lot of money, they could start a bank.
    As such, if they offered a DEBIT card [earning a decent interest rate] I'd be interested.

    “So should you buy the Apple Card? Unless you're fully mired in the Apple ecosystem, the rewards really aren't that compelling. There are other rewards cards that currently offer two per cent back on most purchases, for instance.”

    Do other reward cards offer it back, in cash, in real time?

    Australian reward cards are a joke. Perhaps this will scare them into offering decent deals.

      Especially when you consider that the rewards are focused on the idea that you own an Apple phone rather than an actual credit card. So they're essentially trying to get you to buy more of their products.

      I also find it interesting that the article makes no mention of their actual interest rate. To me that's the first thing that you should be looking at. What will it actually cost to pay off the purchases you make. Not "fluff" like the card will be titanium and look cool.

    If Apple launches this in Australia, the pricing and rewards are likely to be VERY different. Interchange rates typically fund credit card rewards, and interchange in Australia is regulated to be a fraction of what it is in the US. Without any fee revenue rolling in, low interchange revenue, and cash back rewards (ie no breakage!), interest rates would have to be much higher to make it a commercially viable proposition.

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