Apple wants to make the leap from your pocket — to your wallet.
The company will launch Apple Card this month — a joint credit card venture with Goldman Sachs and Mastercard. You can debate the historical significance, but it’s certainly the first card ever to actually require the user to own an iPhone. You can’t even apply for the sleek titanium card without one.
Amid Apple’s claims that the card “completely rethinks everything about the credit card,” National Financial Awareness Day makes this a good time to look at whether or not Apple Card can match the hype.
“While Apple may do a better job of helping consumers visualize the impact of not paying off your card in full each month, and seeing how interest can add up, it’s unclear if this will actually change consumer behavior.”
Upon first glance, you’ll notice the card just looks, well, different — since it contains no trace of an account number anywhere. Of course, some banks have already done away with those antiquated raised numbers on the front by hiding them on the back in simple text. But the bold smooth silver surface minus the traditional account number does add to the mystique.
Next, you get instant cash back to spend immediately through a feature called Daily Cash. Any earned money will drop directly into your Apple Wallet app throughout the day — as soon as purchases have officially cleared. No more waiting until your January statement to arrive in order to start spending your December rewards. A novel approach, for sure, but does it really make a difference?
“Behind the shiny new facade, there likely isn’t that much new value for consumers,” says Brett Holzhauer, who writes about credit cards for FinanceBuzz. “The ability to receive your cash back daily is certainly new, but the average consumer likely doesn’t need to have an extra dollar or two in their wallet that quickly.”
The push for Apple Pay
There are also built-in incentives to buy Apple products and use Apple Pay. Cardholders get 3% Daily Cash back on everything Apple, whether you buy those items at an Apple Store, apple.com, the App Store or iTunes. That includes games, in‑app purchases, and services like your Apple Music subscription and iCloud plan. For non-Apple gear, you receive 2% back just by using Apple Pay — no matter the product, store, app or website. All other purchases will earn just 1% back.
That could wind up costing you.
“Less than 70% of American retailers accept Apple Pay so if you aren’t spending at those locations you won’t be maximizing your cashback rewards,” says Crediful CEO Chane Steiner — who also mentions another important, but little-discussed drawback. “You can’t add anyone to your account which could steer married couples to other cards.”
Apple’s also promising to help consumers with the biggest demon in credit card land: shockingly high interest. “Apple’s Wallet app displays how much you’ll need to pay to avoid paying interest,” says Credit Card Insider analyst Greg Mahnken.
“As a general rule with credit cards, if you don’t pay your statement balance in full each month, your balance will incur interest charges. The difference with Apple Card is that the interface uses colors and clearly displays the costs [of doing that]. If you spend more than you can afford to pay, you’ll pay interest on the Apple Card.”
The APR? A fairly typical 12.99% to 23.99% depending on your credit score and other factors.
Holzhauer, meanwhile, calls Apple’s claim that the card will actually encourage you to pay less interest — dubious. “While Apple may do a better job of helping consumers visualize the impact of not paying off your card in full each month, and seeing how interest can add up, it’s unclear if this will actually change consumer behavior.”
“The ability to receive your cash back daily is certainly new, but the average consumer likely doesn’t need to have an extra dollar or two in their wallet that quickly.”
The card app’s display, with its colorful, easy-to-read spending charts, strives to make tracking your purchases easier than ever, but then again, there are many other free ways to do this.
“You can link almost any debit or credit card to a third-party tool, such as Clarity Money or Mint,” says Mahnken. “These reputable apps can offer insight on trends and help you set budgets.” Plus, he also notes that any card-specific tool, like the Apple Card’s, has obvious limitations. “They often only work with that issuer’s cards. It can be time-consuming if you have multiple cards with multiple issuers.”
The Apple Card verdict? Certainly, Goldman Sachs and Apple stand to benefit. But in the end, according to Steiner, “It probably isn’t an all-around ideal card for most people, but it might be great for anyone who makes Apple purchases on a regular basis.”