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Apple presents its recently launched Apple card as an innovation in a long line of innovations, saying it "completely rethinks everything about the credit card", but it's a bit exaggerated.
Although the Apple card has some compelling attributes, 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 it's just a credit card," says Brian Riley, director of credit counseling for Mercator Advisory Group, a group of Payments and Banking Sector Council by e-mail. Noting that the Apple card will be competing against some well-established broadcasters, including Chase and American Express, he says it will be "a case study on loyalty, will the masses follow Apple?"
If you are tempted to dive into the Apple card, here's how to separate the useful features of the hype.
" MORE: Do you need to get the Apple card?
No, the Apple Card does not "completely rethink everything"
The Apple Card has not so much innovative value as consolidating it.
Unlike many other cash back credit cards, this one is clearly designed for first-time mobile users. In fact, the only way to apply for an Apple card is to go through an eligible iPhone, which is unique (if it is also a potential barrier).
"As with all Apple products, there is really an elegance," says Riley.
But virtually all credit cards can be added to a mobile wallet and used in the same way.
The Apple card has not so much innovative value as it consolidates.
The Apple Card encourages the use of a mobile wallet and provides the following benefits:
Used with Apple Pay:
- 3% refund on purchases made directly from Apple, including Apple stores, within the App Store and for Apple services.
- 3% back at some merchants and via some applications. At the official launch of the card in August 2019, Apple said that Uber and Uber Eats would be among the 3% categories and said that others could arrive.
- 2% on all other purchases made via Apple Pay.
When it is used as a physical map:
- 1% back on all purchases.
But many Apple Card competitors are winning similar or higher rates without requiring that you use a mobile wallet to get them.
And about this "laser engraved titanium" physical card, which you have to ask for separately, by the way? Apple has made fantastic and hilarious efforts to explain how to take care of it, but the best way to do it – and yourself – is simply not to carry it at all. His reward rate is just not competitive today.
" MORE: How 1.5% cash back has become the gold standard of the industry
In terms of fees, the Apple card tricks its absence – but you can find a large number of refund cards that do not require either annual fees or "excessive" fees, which have been extinguished for years. More interesting is the lack of transaction fees or delay in overseas transactions of the Apple Card. It is more difficult (although not impossible) to find refund cards that do not charge a fee for purchases made abroad, although other cards already forfeit these products are not rewarded.
So what's new about the Apple card?
The Apple Card has rethought (ie against its choice) by offering a sign up bonus, a 0% APR introductory period or the ability to add authorized users, all of which are features common to its competitors.
But it's certainly not bad news. The Apple Card brings really fresh offers to the table:
- See your credit limit and APR before you commit to the card. If your card is approved, you can decide, based on the credit limit and APR that you are offered, if you want to accept the transaction. Apple says you will have 30 days to make your decision and that "your credit score will not be affected until you accept it." You will have trouble finding another map displaying this information. before drawing your credit.
- Access customer support based on a text message 24 hours a day, 7 days a week. 24-hour customer service is not new, but having a conversation with the SMS sender is new and ideal if you hate phone calls and long storage times. (You can also call through the iPhone Wallet app.)
- Use Apple Maps to clarify your purchases. You can use the various fees charged with the card to locate the merchant in the Apple Maps application of your iPhone.
And what is rare or interesting?
The Apple Card also offers some features that, although not unusual, are always nice to have and not data:
- Instant access to your card after approval. Start shopping immediately, without having to wait for days before receiving 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 redemption amount or waiting until the end of the billing cycle to access your reserve. These features are welcome, but available elsewhere.
- A billing cycle always at the end of the calendar month. Apple calls this a "common sense" payment schedule, which certainly makes it easier to track the due date of your bill. But other issuers already allow you to set your own billing date.
- Access to financial tools to help you break down and classify your expenses. Useful, but available via many other credit cards and third-party sites, NerdWallet included. (A disadvantage: downloading the history of your transactions on Mint or similar financial apps is not supported.)
- Flash card replacement: If you think your Apple card may have been compromised, you can generate a new card number and invalidate your old one, all in the Wallet app. It's convenient and can save time, but other cards offer free overnight card replacement and / or the ability to "freeze" or "lock" a lost card.
The Apple Card claims to go even further in terms of security by introducing additional privacy measures so that Apple can not know where you bought, what you bought, or how much you spent. (Apple notes that Goldman Sachs has access to your data.)
Are its interest rates "among the lowest in the industry"?
When the Apple card debuted in August 2019, Apple said it would have a variable APR of 12.99% to 23.99% depending on credit worthiness.
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 benefit from this rate.
Although the bottom of the APR range of the Apple Card is above average and higher than other cash back credit cards, only those with excellent credit are likely to benefit from this rate.
And you may be able to do even better with a credit card from a credit union.
It should be noted that the Apple Card application provides excellent visual incentives to help you understand the amount of interest potentially accrued on your credit cards if you do not pay your bill every month. The "Choose Amount" dial changes from red to green because it displays an estimate of the interest you will pay, depending on the amount of your choice.
A longer than average grace period also lasts until the end of this month's billing cycle, instead of the usual 21-day window, which gives you extra time to pay your bill before you start accumulating interest on your balance.
" MORE: The best low interest credit cards from NerdWallet
"Created by Apple, not a bank"?
Apple obviously played a big role in the development of this product. But the card is still issued by Goldman Sachs, an investment bank. And it's Goldman Sachs who will review your application, as well as your credit ratings, credit history and the income you report on your application to decide whether to approve your card.
It's Goldman Sachs, not Apple, who will review your application – including your credit score, your credit report and the income you report – to determine if you will be approved.
This type of underwriting is the norm for the vast majority of credit cards on the market. A handful of "alternative credit cards" can assess creditworthiness beyond scores and credit history – but the Apple card does not actually belong to it.
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