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Apple Card Review – Does It Live Up to the Hype?

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At a Glance
Apple Credit Card
4.2 / 5
Rating

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Apple Card

  • Sign-Up Bonus: None
  • Rewards: All purchases made with Apple earn unlimited 3% cash back; all purchases made using Apple Pay earn unlimited 2% cash back; all other eligible purchases earn unlimited 1% cash back
  • Benefits: Custom payment dates and frequencies, interest calculator, spending summaries, purchase organization and mapping
  • Intro APR: None
  • Fees: None
  • Annual Fee: $0

Advertiser Disclosure: This post includes references to offers from our partners. We receive compensation when you click on links to those products. However, the opinions expressed here are ours alone and at no time has the editorial content been provided, reviewed, or approved by any issuer.

Apple Card immodestly claims to “completely [rethink] everything about the credit card.” Is it correct? Maybe.

Apple Card certainly has a host of innovative features that old-fashioned credit cards don’t, such as daily cash back and numberless physical cards. And it’s a harbinger of the cashless, contactless payments landscape to come. No serious observer can dispute that Apple Card is ahead of its time.

But any product that’s truly ahead of its time must also be competitive in the present. And beyond its novel features, Apple Card works pretty much like any other credit card. Indeed, in spite – or perhaps because – of its novel additions, it lacks some consumer-friendly features common to other popular cash back credit cards.

Here’s a closer look at what sets Apple Card apart, and how it stacks up against other credit cards.

Things to Keep in Mind

Before we dive into Apple Card’s details, three points bear mentioning.

First, though cardholders who don’t pay their statement balances in full each month will be subject to interest charges that vary with their creditworthiness and prevailing benchmark rates, Apple promises that Apple Card will have no fees: no annual fee, no late fee, and no over-limit fee. If that’s true, it will be a fantastic card for budget-conscious consumers who don’t expect to accumulate rewards fast enough to offset unavoidable fees.

Second, Apple Card is designed to work with Apple Pay, which runs on Apple hardware only. If you’re one of the many millions of iPhone users in the United States, this card is for you. If you’re an Android loyalist, you’re out of luck.

Third, Apple Card isn’t publicly available yet. Apple says it’ll be ready to drop in summer 2019, but the exact date has yet to be announced. We’ll update this post as we learn more about release timing and yet-to-be-announced features.

Key Features

Here’s a closer look at Apple Card’s most notable features.

Earning Cash Back

Apple Card has a three-tiered cash back program:

  • 3% Cash Back. All purchases from Apple earn an unlimited 3% cash back. These include, but are not limited to, purchases from Apple.com, physical Apple Stores, the iTunes Store, the App Store, and in-app purchases.
  • 2% Cash Back. All purchases made using Apple Pay earn an unlimited 2% cash back. Hundreds of major retail chains and brands, encompassing more than 2 million individual merchant locations online and off, accept Apple Pay. If you’re not familiar with how Apple Pay works, see its site for details.
  • 1% Cash Back. Purchases made with merchants – online, offline, and in-app – that don’t accept Apple Pay earn an unlimited 1% cash back.

Redeeming Cash Back

Cash back earned through Apple Card purchases accrues daily. Each day a purchase posts to your account, you’ll receive the requisite cash back on your Apple Pay Cash card in the Apple Wallet app. From there, you can use it to pay for purchases within or without the Apple ecosystem, or to make payments on your Apple Card balance.

If you don’t have an Apple Pay Cash card and aren’t interested in getting one, you must accept cash back earned to your Apple Card via statement credits, which may not be much of a sacrifice.

Apple Pay Integration

Apple Card is essentially an offshoot of Apple Wallet. It’s designed for use in conjunction with Apple Pay – or, more specifically, as the user’s default Apple Pay payment method. Apple clearly expects most Apple Card transactions to be contactless, executed through a Web portal or with the tap of an iPhone.

Beyond Apple Card’s novelty as the first truly “contactless first” credit card, users benefit from Apple Pay’s stringent security features. These include:

  • Unique Device Number. Your Apple Card is issued with a unique number that’s stored in your iPhone’s Secure Element, the secure microchip that hosts the phone’s most sensitive functions.
  • Two-Factor Purchasing. Every purchase requires your unique device number, plus a unique one-time code generated on the spot.
  • Purchase Authorization Via Face ID or Touch ID. This renders stolen phones all but useless for making purchases.

Apple Card also takes data security seriously. Apple and Goldman Sachs, the card’s issuer, vow never to share customer data with third parties. Only Goldman Sachs has access to users’ transaction histories and personal information.

Speaking of Goldman Sachs, this is the first consumer credit card issued by the global megabank’s consumer finance arm. It will be interesting to see how the user experience stacks up against cards issued by more seasoned competitors, such as Chase and Barclays.

Physical Credit Card

Apple Card isn’t 100% virtual. The physical Apple Card is a titanium card that looks and feels just like any other premium credit card, except that it’s much sleeker. The card face is a minimalist triumph, with no cardholder name, card number, or CVV and virtually no marks to mar its metallic hue. Apple and Goldman Sachs tout the security benefits of Apple Card’s featurelessness; without any information to identify the card, it’s useless in the wrong hands.

Real-Time Fraud Protection

Apple Card’s real-time fraud protection feature notifies you every time your card is used to make a purchase. If something doesn’t seem right about a transaction, or you know for a fact that you didn’t make it, you can immediately initiate the dispute process by tapping the notification.

Purchase Organization & Mapping

Apple Card automatically organizes purchases by purchase category – entertainment, food and drinks, and so on – and merchant. Categories are color-coded for easy visualization and totaled monthly for easy budgeting. With features like that, who needs a paid budgeting app?

Apple Card also automatically maps purchases, showing you where you’ve spent money recently, literally. If a real-time fraud protection notification slips your notice, perhaps seeing a purchase in a city you’ve never visited will jog your memory.

Spending Summaries

Apple Card’s spending summaries, visible in the Wallet app, reveal how much you’re spending, and on what, in any given week or month. You can view spending trends over time here too, which comes in handy for the periodic budget reviews you should be doing.

Payment Due Dates & Frequency

By default, Apple Card statements are due at the end of the month. If you prefer to pay balances more frequently – and reduce interest charges when you can’t pay off your balance in full before the statement due date – you can set weekly or biweekly payments too.

Interest Calculator

Apple Card’s built-in interest calculator automatically tallies expected interest charges when you pay less than the full balance due on your card before the end of the grace period. While credit card issuers are required to reveal on each statement the true cost of making only the minimum payment due in comparison with at least one larger monthly payment, this is a far more robust and interactive interest calculator that’s significantly more likely to nudge you to boost your monthly payment.

Interest Reduction Suggestions

If the interest calculator isn’t enough, Apple Card also provides “smart payment suggestions” that encourage cardholders to increase their monthly payments, thereby decreasing their total interest liability. It’s not clear how Apple Card arrives at these suggestions, but they appear to be based on cardholders’ spending patterns and payment history.

Text-Based Support

Apple Card has a text-based support system that’s available 24/7. If you run into an issue with the card or have a question that doesn’t concern a disputed charge, which you can handle through the real-time fraud protection interface, this is your ticket to a resolution.

Important Fees

Apple claims that Apple Card won’t charge any fees. That means no annual fee, no late payment fee, no returned payment fee – no expenses beyond charged purchases for cardholders who pay balances in full by the statement due date. Until Goldman Sachs releases the official cardmember agreement, however, take this no-fees promise with a grain of salt.

Advantages

These are among Apple Card’s principal advantages.

1. No Fees

Apple claims that Apple Card won’t charge any fees. If Apple and Goldman Sachs follow through, Apple Card will be all but unique, as even avowedly low-fee cards assess fees for less common occurrences such as late and returned payments. However, until we see the actual cardmember agreement, which hasn’t yet been released publicly, we won’t know for sure if or how Apple Card will qualify its no-fees promise.

2. Cash Back Accrues Daily

Apple Card is perhaps the only widely available credit card that accrues cash back on a daily basis, rather than at the end of the statement cycle. Although the accrual frequency doesn’t affect net cash back earnings or cash back earning rates, it’s certainly nice to see your spending subsidized in near-real-time.

3. Solid Cash Back Rates on Apple & Apple Pay Purchases

This card earns 3% cash back on virtually all purchases within the Apple ecosystem, excluding purchases with Apple Pay merchants. This 3% category covers:

  • Apple.com purchases
  • Purchases at physical Apple Stores
  • iTunes Store purchases
  • App Store purchases
  • In-app purchases

Apple Card also earns 2% cash back on purchases made with Apple Pay merchants. So if you’re able to limit your spending to the Apple and Apple Pay ecosystems, you’ll net somewhere north of 2% cash back on this no-annual-fee card, depending on your exact spending mix.

4. Above-Average Security Features

Apple Card is more secure than your average credit card. The physical card doesn’t have a card number or CVV, so you won’t have to worry about what could happen between the moment you lose your card and the moment you freeze your account. The virtual card is denoted by a unique device number locked away in your iPhone’s Secure Element, far from prying eyes.

Perhaps most consequentially, Apple has a strict privacy policy that forbids data sharing with third parties. There’s no need to opt out, which is often easier said than done, and only Goldman Sachs has access to your transaction history.

5. Real-Time Fraud Protection

Apple Card has another security feature worth touting: real-time fraud protection that alerts you whenever your card is used to make a purchase and lets you flag potentially fraudulent transactions with a single tap. Compared with the traditional dispute resolution process, this is a snap, even when flagged charges turn out to be legitimate.

6. Easy, Flexible Payments

Apple Card’s default payment due date – the last day of the month – is easy to remember, even without the helpful reminders. If you’re trying to budget on an irregular income and prefer not to wait until the end of the month to pay off your entire balance, Apple Card’s customized weekly and biweekly payment intervals have you covered. Other credit cards let you pay off balances throughout the month, but few make it as easy as Apple Card.

7. Interest-Reduction Features

Apple Card’s interest calculator and interest-reduction suggestions are classic examples of “nudge” theory in action. By revealing just how much you’ll save over time by paying a little more up front, these features nudge you to make smart financial decisions. Of course, it’s always best to pay off your balance in full by the statement due date, but when unexpected expenses make that impossible, it’s nice to feel like your credit card issuer is on your side.

8. Useful Budgeting & Spending Control Features

With so many budgeting and spending control features, Apple Card feels like a personal budgeting suite with a spending aid built in.

Maybe that’s the point. Though most small business credit cards have basic expense tracking and reporting features, Apple Card’s package is unusually robust for a consumer credit card. If what’s keeping you from building and sticking to a household budget is the inconvenience inherent in standalone budgeting software, this is a potential game-changer.

9. Text-Based Customer Support

Apple Card’s text-based customer support is a low-friction alternative to menu-laden, over-automated phone support and unpredictable email support. Whether this feature is as efficient as Apple and Goldman Sachs promise remains to be seen, but it’s difficult to see it being worse than the status quo – for relatively simple issues, at least.

10. No Penalty Interest Charges

Apple Card doesn’t charge penalty interest. While it’s best never to find yourself in a position where penalty interest would apply, the assurance that you won’t be unduly penalized for a lapse beyond your control is certainly welcome.

Disadvantages

Consider these potential disadvantages before applying for Apple Card.

1. Requires Apple Pay & Apple Hardware

Apple Card’s biggest drawback is its exclusivity. The card requires Apple Pay, which runs exclusively on Apple hardware, meaning it’s not appropriate for Android or Windows device users.

If you’re set on applying for Apple Card but don’t have an iPhone or other compatible Apple device, Apple Watch is your most cost-effective option. Apple Pay runs on Apple Watch just fine, and you can pick up refurbished older versions – Series 1, 2, and 3 – for less than $100. That’s still a significant outlay, though, and no other credit card on the market requires compatible hardware.

2. Only 1% Cash Back on Non-Apple Pay Purchases

Apple Card earns just 1% cash back on non-Apple Pay purchases. If your daily, weekly, and monthly consumption habits involve merchants that mostly accept Apple Pay, you shouldn’t have trouble earning the higher 2% cash back rate, but not all merchants do. Square has a non-exhaustive list of major merchants that do accept Apple Pay. Do yourself a favor and review it before applying for this card.

3. Interest Charges in Line With or Higher Than Comparable Cards, Despite Assurances

Apple and Goldman Sachs say it’s their shared goal to keep interest rates lower than most other credit cards. That doesn’t jibe with the estimated rate range published on Apple Card’s website, which is 13.24% to 23.24% APR.

Yes, that range is just an estimate, and it’s subject to change with prevailing benchmark rates. But there’s no denying that 23.24% APR is pretty high for a premium consumer credit card. You can do better with one of these low-APR credit cards.

4. Apple Card Is Goldman Sachs’ First Credit Card

Apple Card is the first consumer credit card issued by Goldman Sachs Bank. Apple touts this as an advantage, arguing that Goldman Sachs isn’t bound by the constraints of legacy credit card issuers such as Chase and Barclays. And it’s not as if Goldman Sachs is entirely new to the consumer finance realm; its Marcus by Goldman Sachs loan and savings products are innovative and well-liked.

That said, it’s not hard to imagine a first-time credit card issuer experiencing some growing pains, especially given Apple Card’s novelty. At a minimum, don’t be surprised to see iterative changes soon after launch as Goldman Sachs figures out what works and what doesn’t.

Final Word

There’s a lot we don’t yet know about Apple Card. Until the cardmember agreement is publicly available, for instance, we won’t know for sure that Apple and Goldman Sachs stand by their “no fees” pledge. Perhaps more importantly, no one has their hands on the card itself yet, so the user experience remains a mystery.

Based on what’s publicly available from Apple and other sources, however, I’m impressed by Apple Card. If you’re a committed Apple Pay user with the hardware to back it up – an iPhone, Apple Watch, or maybe an iPad – then I wouldn’t fault you for ditching your traditional credit cards and going all-in on Apple Card when it’s released. Users who restrict their spending to Apple Pay merchants only stand to earn 2% cash back across the board, about as good as it gets on a consistent basis for premium cash back credit cards.

Verdict
Apple Credit Card
4.2 / 5
Rating

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Apple Card

Apple Card is a novel, if not wholly unique, credit card for Apple Pay users.

If you’re an Apple loyalist who can easily limit your spending mostly to merchants that accept Apple Pay, Apple Card could easily replace whatever card you currently use for day-to-day spending. More likely, you’ll use your Apple Card for all Apple Pay transactions and transactions where Apple is the actual merchant, and keep your other cards for use outside the Apple ecosystem. Either way, you’ll love this card’s industry-leading security features and user-friendly features.

If you’re an Android user or frequent traveler who’d do better with more generous rewards cards, keep moving; Apple Card isn’t for you.

Notable advantages include the promise of no fees, a solid cash back program for Apple loyalists, industry-leading security features (including real-time fraud protection), consumer-friendly features (including interest calculators and budgeting tools), and seamless customer support.

Drawbacks include Apple exclusivity, meager cash back on non-Apple and non-Apple Pay purchases, a disconnect between promised low interest and estimated rate range, and Goldman Sachs’ lack of experience in consumer credit cards.

Overall, Apple Card is a great product for Apple loyalists. For those whose daily spending primarily involves Apple Pay merchants, it’s a suitable everyday spending card. For those outside the Apple ecosystem, though, it’s not even an option.

Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Brian Martucci
Brian Martucci writes about frugal living, entrepreneurship, and innovative ideas. When he’s not interviewing small business owners or investigating time- and money-saving strategies for Money Crashers readers, he’s probably out exploring a new trail or sampling a novel cuisine. Find him on Twitter @Brian_Martucci.

Comments Disclosure: The below responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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