Apple loves big reveals, but its newest product isn’t a phone or wireless earbuds. It’s the Apple Card, a cash-back credit card. Apple markets its new piece of plastic – actually, it’s made of titanium – as “a new kind of credit card. Created by Apple, not a bank.” Does it really “completely rethink everything about the credit card,” like Apple claims?
Here’s everything you need to know to decide for yourself.
What is the Apple Card?
Apple Card is designed to pair with Apple Pay, the app-based payment system already used by millions of dedicated iPhone users. It’s a cash back rewards credit card, but with a few twists. Since Apple Card is the product of the brains behind other Apple products, it’s tailored to work perfectly with your existing Apple systems and products.
How It Works
Apple is serious about its claim to reinvent the credit card. The company works to offer superior features compared to other cards.
Most notably, this card is fee-free. That means no:
- Annual fees
- Over-the-limit fees
- Late fees
- Reward-redemption fees
- Foreign transaction fees
- Hidden fees
It sounds too good to be true, right? Well, Apple Card makes this fee-free model a reality. If you’re a week late to make your payment or accidentally spend $50 over your limit, you won’t pay a single penny in fees. You’ll only be responsible for the interest charged to your balance. Few other cards, if any, can offer this benefit.
Apple Card also sets itself apart with its cash back rewards, which place a heavy emphasis on using the card through Apple Pay rather than in physical form:
- 3% cash back when you use Apple Pay to make purchases from Apple, Uber, Walgreens, and other select partners
- 2% cash back when you use Apple Pay to make purchases with any other retailers
- 1% cash back when you make purchases with your physical Apple Card
Uniquely, these cash rewards are available immediately in your Apple Cash card. There are no points, holds, or limits. The cash back rewards system is simple: You receive either 1%, 2%, or 3% cash back on every purchase, and the value is available to spend however you want immediately from your Apple Cash card.
With one caveat: You have to set up Apple Cash, a virtual cash account that is Apple’s answer to PayPal. Your cash-back rewards, “daily cash,” as Apple dubs them, go into this account. If you don’t set up Apple Cash, the daily cash can only be applied to your balance. (Giving a boost to Apple Cash may well be one of Apple’s motives for launching this product).
Accessibility of the Card
The other innovative benefits that set this card apart involve tracking and ease-of-use. As the company explains, the card “lives on your iPhone” in your Wallet app. This makes it possible to track and analyze your spending habits with unprecedented depth and ease. You don’t need to log-in to a website or separate mobile app to access any information.
Instead, with a simple click into your Wallet, you can do all of the following:
- View transactions by week or month
- View transactions on a map with one tap
- List purchases by category, like Food and Drinks, to understand your spending patterns
- View purchases by merchant name
- Make a payment
- Receive and respond to fraud alerts
The card even helps you save on interest by estimating real-time interest costs based on your desired payment. If you can’t pay off your full balance to eliminate your interest payment, this feature guides your informed decision to pay as little interest as possible.
How it Stacks Up With Other Cards
If you’re an avid Apple user, especially if you already use Apple Pay, this card is tailor-made for you. You’ll note that the biggest rewards are on Apple products/services, so if you were thinking of splurging on that 27” iMac, this would be the way to buy it.
Of course, the card is subject to credit approval, so make sure your score won’t disqualify you. Apple hasn’t released its exact credit parameters, it adheres to standards set by Goldman Sachs (which is the issuing bank for the card). This means you could be denied if you have a score lower than 600 and/or unpaid debts, negative public records, frequent credit card or loan applications, or a high debt-to-income ratio.
As long as your credit score is decent and you know you can benefit from Apple Card’s cash back rewards model, this fee-free card is a great match for your wallet.
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