Recently, Apple announced the launch of a new credit card offer, issued by Goldman Sachs. Many tech companies have credit cards, from Amazon to Uber, so it’s fair to wonder: is the new Apple Card any good, who should (or will) sign up, and what does the move mean for the credit card business overall?
After doing a thorough review of the Apple Card’s publicly available terms, WalletHub has offered the following analysis:
- Strong Apple Pay Rewards: The Apple Card is most rewarding when used through Apple Pay. Cardholders earn 3 percent back when buying Apple products using Apple Pay. Other Apple Pay purchases earn cardholders 2 percent back.
- Average Physical-Card Rewards: Apple Card purchases made with the physical credit card, rather than via Apple Pay, earn just 1 percent back. The average cash rewarsd card give 1.06 percent back on all purchases, according to WalletHub’s data. In contrast, the best rewards credit cards offer the equivalent of at least 2 percent back on all purchases.
- No Fees: The Apple Card has no annual fee and no foreign transaction fee. The average credit card charges a $17.35 annual fee and a 1.50 percent foreign fee.
- Promise of Low Rates: Apple says its goal is “to provide interest rates that are among the lowest in the industry.” But the devil is in the details when it comes to APRs, and given the card’s average rewards structure, consumers shouldn’t hold their breath.
“The banks made a big mistake by not only supporting Apple Pay, but also paying Apple for every transaction,” said Odysseas Papadimitriou, WalletHub’s CEO. “Now, Apple is pressing their advantage with the Apple Card, and banks will pay a heavy price unless they correct course quickly. This new offering is aimed directly as millennials and could put Apple in the driver’s seat as the payments landscape becomes increasingly digital.”