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The Apple Card is officially here. On Aug. 20, 2019, Apple announced that the much-talked-about card is now available to all US customers.
Apple first announced its partnership with Goldman Sachs Bank USA on the card on March 25, 2019, coinciding with the debut of the company’s new video streaming service, Apple TV+. The Mastercard-branded card touts simplicity, transparency and privacy.
Cardmembers will have the flexibility to use the Apple Card via Apple Pay or request a sleek, minimalist titanium card. While the card will have a chip, it won’t have an expiration date, card numbers or a CVV code.
No fees, simple rewards
It’s no surprise that the Apple Card plans on keeping the terms and conditions simple. There is a $0 annual fee, no late fee or over-the-limit fees, and its foreign transaction fee is none. When you buy something on the card, you get a percentage of your purchase back in Daily Cash right away, with no limits on what you can earn.
Earn 2% Daily Cash every time you use Apple Card with Apple Pay, 3% Daily Cash on all purchases made directly with Apple, including at Apple Stores, apple.com, the App Store, the iTunes Store and for Apple services, and using Apple Pay for Uber and Uber Eats, and 1% Daily Cash on purchases made with the physical titanium card.
The rewards for Uber and UberEats are new, and Apple announced in August 2019 that more merchants would be added at the highest rewards rate in coming months. This could add value to the card for customers who don’t spend enough on Apple purchases to justify getting the card.
Since Daily Cash goes right back onto your card, you can spend it like cash. However, you do need to have an Apple Cash account; otherwise, Daily Cash is applied as a statement credit.
That means once you are approved, you can start using your card in the Apple Wallet app right away. The app will show your card balance, number of days until your bill is due and your activity.
Unique, built-in purchase tracking, interest calculator
If you see an unfamiliar charge made with the card, you can tap on a map and see the retailer, the address and how much was spent. All spending is assigned a category and color so you can see how you’re using the card.
The card has a built-in calculator that will estimate interest costs based on how much you pay on your balance every month. You’ll also get suggestions on how to pay off your balance faster and save on interest. And the card’s payment due date is always the last day of the month.
The Apple Card generates a unique card number created on an iPhone and is then stored safely in its Secure Element, a special security chip used by Apple Pay. Every purchase is authorized with Face ID or Touch ID and a one-time unique dynamic security code.
Every time you make a purchase, you’ll get an instant notification on your iPhone. If there’s unusual activity, you’re notified. If you don’t recognize a charge, tap it and Apple Card takes it from there to investigate.
While there’s a $0 annual fee, the purchase APR on the apple card will range from 12.74% to 23.74% Variable, based on creditworthiness.
Consumers, experts not ‘wowed’ by card offering
Reaction to the card was swift. While Apple Pay is available in “millions of stores,” a Reddit commenter noted that using Apple Pay “sounds great until you realize how few [places] take Apple Pay, so that 2% can’t be really utilized to its fullest extent.” Others complained about receiving only 1% cash back when using the physical card.
Commenters in the MyFico forum felt that Apple Card was “poised to shake-up the credit card industry.” Another said they didn’t want to get a card that forces them to use an iPhone to pay for purchases. “I already have a 2% card from PayPal and I get 5% off Apple products from my Amazon Store Card, as well as 3% back on iPhone purchases from Xfinity Mobile as part of my cell phone category with BBVA,” they wrote.
After evaluating what it has to offer, the simple truth is the Apple Card’s rewards aren’t particularly compelling, said Matt Schulz, chief industry analyst at CompareCards.com. “They’re nothing we haven’t seen before,” he said. “I’d suspect it will be a challenge to have this card make a major splash in the credit card marketplace.”
It remains to be seen what merchants Apple expands the 3% Daily Cash rewards rate to, and whether that could make the card a better value for people who aren’t heavily invested in the Apple brand.
The partnership on the Apple Card is seen as a win-win for Apple and Goldman Sachs Bank USA, however.
For Apple, the card can help stimulate spending to compensate for slow iPhone sales as consumers find its upgrades more expensive and less compelling, writes Ali Raza for PaymentsSource. Apple is also expected to receive what many speculate will be a significant portion of the interchange transaction fees every time an Apple Card is used, Raza reported.
For Goldman Sachs Bank USA, it’s an entryway into the multibillion-dollar credit card industry with a company that was No. 1 on Forbes’ world’s most valuable brand list in 2018. It’s also a bit of a coup for Goldman Sachs Bank USA since Apple had been partnering with Barclays for special financing on its products.