Not long ago, Apple created their own credit card that boasts a number of impressive features like daily cash back and no fees for anything – but should you get it? With the unbelievable amount of credit cards available on the market today, can the Apple credit card (called “Apple Card” in official lingo) offer something compelling enough to attract new customers? We think so.
For those unfamiliar, Apple started offering their own credit card (not to be confused with previous offerings such as the Apple Rewards card from Barclays) that was specially designed to work with Apple Pay and also comes with a titanium, laser-etched card. According to Apple, the card was created with the intent of helping consumers pay as little interest as possible while allowing them to earn real cash back rewards instead of obscure point systems that are difficult to understand.
The key selling point of the card is that it has no fees of any kind. That means no annual fees, transaction fees, and most surprisingly – no late fees. More on that later. The next key feature is that Apple Card offers daily cash back. Instead of needing to wait until a minimum threshold is met before payout, payouts are made daily. The Citi Double Cash card, by contrast, requires a minimum of $25 cash back to be accrued before a payout will happen. And instead of relying on a system based on points, miles, or some other metric, Apple Card simply returns 1% to 3% of your daily purchases back at the end of each day. Currently, there is no other card on the market offering daily cash back like this.
The Cash Back System
Apple Card cash back rewards are broken up into three tiers. 1% Cash back can be earned on any transaction made with the titanium card that Apple sends you on approval of your application. 2% Rewards can be earned any time that you use Apple Pay. That means using your iPhone on a payment terminal. 3% Rewards are earned when making purchases at a select retailer such as Apple itself, T-Mobile, Nike, Uber, Walgreens, and several others on a list that changes periodically.
What’s clear about this arrangement is that Apple is trying to get people to use Apple Pay. While a lot of people carry around Apple Pay-compatible devices, many don’t use the service and instead prefer to stick with the more familiar credit or debit card that resides in our wallet. This is likely Apple’s way of trying to wean us off of credit cards and instead transition us into mobile payments. Using a higher cash back reward tier is certainly a commendable way to do that.
The Dark Side of Apple Card
So what’s the catch? According to applicants, the process for applying for Apple Card is completely automated. This means credit decisions (whether or not you’re approved, what your credit limit is) are all made by an automated system that is entirely a black box. That means no one knows exactly how it works except for Apple. With traditional credit card issuers, you can often call them and ask for a reconsideration of your application if denied, or ask for a larger credit limit – but not with Apple Card.
Another important concern to consider is that even though Apple says you will never be charged a late fee for not making your monthly payment, you will still likely suffer from damage to your credit report for missing a payment. Apple may not penalize you, but it’s quite likely that you will still suffer some negative consequences. According to Apple, all they will do if you don’t make your payment is simply continue to charge you interest as normal .
Our verdict? If you’re in the market for a new credit card, you should consider the Apple Card. However, the card is not for everyone and its rewards may not be the best you can get. But if you’re looking for a simple cash back rewards card, Apple Card is tough to beat.
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