In-Depth Analysis: The New Apple Card Promises No Fees, Privacy, and Cash Back

By Anna Breuer on 26 March 2019
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Apple debuted its long-awaited credit card at an event at the Steve Jobs Theater on Monday, hoping to capitalize on its reputation for user-friendly products and a commitment to privacy.

The new credit card, dubbed the Apple Card, will be offered in collaboration with Goldman Sachs. The company known for innovations including the Mac, iPod, and iPhone is counting on the loyalty of millions of iPhone users to help the card succeed.

As newcomers in credit cards, Apple and Goldman are starting with a tabula rasa that allowed the company to offer new features that more established credit card issuers might have balked at.

“A credit card created by Apple, not a bank” was Apple’s message on Twitter and YouTube following the launch.

The Apple Card has no annual fee, a cash rewards program, a simplified application process via the Wallet app on the iPhone, and promises to be “private and secure.” Apple is also promising lower interest rates and the Apple Card will sync with the Wallet app and provide an analysis of cardholder spending.

In addition to being accepted wherever standard credit cards are used, the Apple Card will be accepted worldwide anywhere that Apple Pay service is provided and the cash back program rewards cardholders for using Apple Pay over the physical card.  The credit card number, which will use Mastercard’s credit-card network, does not appear on the card itself, which is made of titanium and laser etched.  The additional security comes from technology Goldman acquired in 2017 that   generates one-time, virtual card numbers at the time of each transaction.

The Apple Card can be used via Apple Pay in apps and on the web. It will be available across all Apple devices, Apple said. The card charges no annual fee, no late fees, no foreign-exchange fees, and no over-the-credit-limit fees.

Apple is using machine learning and Apple Maps to transform standard and rather cryptic entries on a credit card statement into something that is meaningful and easy to understand. A budgeting feature will automatically organize and summarize purchases so cardholders can see how much they’ve spent and where they’ve spent it. Each category is represented by a specific color, for example orange for food and beverages, yellow for shopping, and green for travel.

The Wallet app will also display cardholder trends in spending to make increases in certain categories more apparent.

Daily Cash is the Apple Card’s cash back feature. Cardholders will get 2% when using Apple Pay, 1% when using the physical card, and 3% when making purchases of Apple products and services.

Finally, although Apple is promising “lower interest rates,” its rates are in line with many credit-card products and annual rates would range from 13.2% to 24.4%, depending a cardholder’s creditworthiness.

(Photo: Accura Media Group)

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