All we know so far about the operation of the Apple Card

The credit card recently announced by Apple looks attractive on paper: no late fees or international, up to 3% cash back paid daily, and a titanium physical card. So, are there any catches?

There is a lot to learn about the Apple card, how it works, how it is obtained, and how it compares with other credit cards. Here are all the key information you should know about the Apple card if you plan to get one.

How are you eligible for an Apple Card?

You need an iPhone to request an Apple card and you may also need an existing credit. Apple has refused to share a range of exact credit scores for you to qualify for its credit card, but according to the variable interest rates shown on its website, we know that those with a rating of lower credit will be subject to higher interest rates. up to 24.24 percent. This is comparable to other credit cards in this category, such as Chase Freedom or Discover Card, which also offer no annual fee cash back, but do not necessarily change the status quo.

The Apple Card is issued by Goldman Sachs and payments are processed by Mastercard. Apple tells The edge Goldman Sachs will consider other criteria than credit ratings, but does not specify which one. Goldman Sachs declined to comment.

When the Apple Card will be available this summer, you will be able to apply through the Wallet app on your iPhone. Once approved, you will have instant access to a digital version of the map that will automatically appear in the application. After a short period of waiting, the smart physical card will be shipped to you, which you can then use at retailers who accept Mastercard. For the moment, Apple does not plan to allow users to register via a web browser.

How do you use the Apple card?

You can use the Apple card in three ways. If you choose it as a payment source in Apple Pay, you can use it where you normally use Apple Pay, whether online or through direct payment sales terminals and other contactless service points.

The physical map works exactly like a conventional credit card. However, Mastercard has confirmed The edge it does not support contactless payments, so you can not simply plug the titanium card into a terminal. Non-Apple rewards can not exceed 1% cashback per purchase for the physical card.

The Apple card has no numbers, no CVV, and no expiration date printed on the card, but it has a magnetic stripe and a chip. If you pay online at a merchant who does not accept Apple Pay, you will use the third payment method: return to the Wallet app to generate these numbers virtually. You can keep the same credit card number or generate a new number for each transaction. This is similar to how banks allow you to create new digital credit card numbers for online payments to prevent the misuse of your information.

What are the advantages of the Apple card?

With the Apple card, Apple says it will be easier to manage your payments. Apple uses machine learning to convert map data and bank transaction data to the exact names of the stores you visited for the purchases you made, instead of the usual series of confusing company names.

The card benefits include a 2% cash back on all Apple Pay purchases and up to 3% discount on Apple products, including digital services like Apple News Plus, iCloud storage, and more. Apple Music and in-app purchases for iOS games.. All other purchases entitle you to a cash back of 1%.

Apple promises you will not have to pay any fees to use the card. This means no annual fees, no international fees when traveling abroad or when shopping on foreign websites, no excessive fees, or late fees. Nevertheless, there is a major interest in paying the full balance every month: like any credit card, you can accumulate interest if you are late in payments. Apple does not promise any penalty interest rate, so the interest rate you see when you qualify for the card is the one you get. Apple will also display an interest estimator showing the amount of your interest if you let your balance add up. However, it is important to note that late payments may still affect your credit score.

Finally, Apple is betting on confidentiality as one of the benefits of the card. Apple says do not see what you buy or where you buy it. You will also need to authorize payment via Face ID or Touch ID, which is why you will not be able to use the Apple Card with an Android device. It also has fraud alerts to inform you of any suspicious activity.

How does the Apple Card compare to the competition?

With the Apple card, Apple has joined the ranks of technology companies like Amazon and Uber, who own their own credit cards. But his rewards are late: his competitors offer sign-up bonuses, unlike Apple. Amazon offers a 5% cash back on Amazon purchases and a $ 50 gift card when you register. Uber offers 4% on all meals, as well as 100 USD when you spend 500 USD in the first three months. "A 3% discount on Apple products is disappointing," says Tim Devaney, credit and personal finance expert at Credit Karma.

Experts – even from Goldman Sachs itself – agree that the Apple Card could offer a better cash back. Apple hopes to attract customers with a competitive refund rate of 2% on all the products you will buy – but not all retailers accept Apple Pay. Citan Double Cash offers the same rate of 2% in 100% of cases, says Devaney.

Other credit cards also provide at least some categories of purchases that consistently offer you a 5% discount, for example on groceries or gasoline purchases, although not all of them. they often alternate categories every two or three months. Sometimes these categories include a 5% cash back on Apple Pay purchases, which makes Apple's 22% cash backs look meager in comparison.

"It does not really fascinate me," said Rivka Gewirtz Little, director of research on global payment strategies at the International Data Corporation. The edge. "I'd like Apple to demonstrate innovation in transforming its way of paying."

Similarly, the interest rates of 13.24% to 24.24% calculated by Apple Card on the basis of solvency are neither better nor worse than the rates of its competitors, despite the comments made by the company in about "interest rate cuts". "If Apple really wanted to blow people up, they would have put a card with 0% APR. This would have been consistent with the very idea that the iPhone and the iPad completely revolutionize industries, "says Devaney. "If they issued a card with 0% APR, not just an intro, but never an APR, that would have blown everyone up."

The main feature of the Apple Card is that it is convenient to sign up and be available immediately, says Sarah Silbert, chief credit card editor at The points guy. "It's not an unattractive option if you do not have a balance," she says, citing details of Apple's behavior on how interest can still accrue if you're late with payments. "You get a cash back, so you can do worse." Silbert notes that users interested in premium designs may be attracted by the titanium material of the Apple card, similar to the value of American Express cards for their designs. At the same time, Apple could have offered protection of purchases, which would make sense for major purchases of computers and phones, she adds.

One thing is certain: the experts agree that the Apple card is designed for iPhone users who already buy many Apple products. A three percent cash back gives them the benefit of applying a small discount every time they pay for Apple products, including services, instead of waiting for a sale .

And if you lose the card?

If you lose the Apple card, you can freeze it and order a new one. Apple says that you can continue to use your virtual card in the Wallet app during the reissue of the physical card.

Similarly, Apple's approach to data privacy differs from that of other credit card companies: Apple relies on Goldman Sachs to secure users' credit card data, which also means Apple will not be held responsible for any violation. Once again, Goldman Sachs declined to comment.

When will the card arrive?

The Apple card opens for applications from the summer of 2019. But, although the public launch of the card is in several months, Goldman Sachs employees could be among the first to get the card . In an internal memo shared with The edgeDavid Solomon, CEO, wrote to employees, "I know that many of you are eager to apply for and use our credit card. In a short time, the Marcus team will come back to you with details on how we can get there. "

For the rest of us, we will have to wait for the public launch to find out how the map actually works in practice.