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You may have heard that Millennials prefer to use cash and they hate credit cards (one survey said only 33 percent actually have one). The truth is, Millennials tend to carry fewer cards and are more thoughtful about choosing one. So, Apple and Goldman Sachs are creating a new credit card that aims to grab the attention of the largest living adult generation, especially the ones who are loyal to Apple.
How does this card stack up against others?
Cardholders will reportedly earn 2% back on most purchases. Apple may also offer bonuses when purchasing their products and services with the card. The 2% back makes it comparable to Citi Double Cash (up to 2% cash back: 1% when they buy, plus 1% back when you pay).
It’s also comparable to the Chase Freedom Unlimited®. The Chase Freedom Unlimited® comes with the ability to earn at least 1.5% cash back on all purchases. Cardholders earn unlimited:
- 5% cash back on travel purchased through Chase Ultimate Rewards®
- 3% cash back at restaurants, including takeout and eligible delivery services
- 3% cash back on drugstore purchases
- 1.5% cash back on all other purchases
There is no limit to how much cash back can be earned.
Both cards are on our list of The Best No Annual Fee Credit Cards.
New Chase Freedom Unlimited® cardholders can earn an additional 1.5% cash back on everything they buy (on up to $20,000 spent in the first year) – worth up to $300 cash back! That means new cardholders can enjoy:
- 6.5% cash back on travel purchased through Chase Ultimate Rewards® (Chase’s premier rewards program that lets you redeem rewards for cash back, travel, gift cards, and more)
- 4.5% cash back on drugstore purchases
- 4.5% on dining at restaurants (including takeout and eligible delivery service)
- 3% on all other purchases
New cardholders earn this extra 1.5% cash back on up to $20,000 spent in the first year.
Given the fact that there are so many comparable rewards credit cards on the market, we’ll have to see whether Apple’s features and bonus incentives are innovative enough for customers to bite.
Will the new Apple credit card replace Apple’s existing Barclays credit card?
This credit card will reportedly replace the existing Apple credit card with Barclays (who are also a provider for one of the best credit cards for international travel). The current card is designed to help Apple lovers pay for their favorite products and earn reward points. The rewards structure looks like this:
Every 2,500 points gets you a $25 Apple Store Gift Card or iTunes Gift Card. Cardholders will earn:
-3 points for every $1 spent at Apple
-2 points for every $1 spent at restaurants
-1 point for every $1 spent on all other purchases
-Each time you earn 2,500 points, you get a $25 Apple Store or iTunes Gift Card
Unless you are constantly shopping at Apple or on iTunes, you could earn more overall using cards like the Chase Sapphire Preferred or Capital One Venture. You may even earn for Apple purchases using the Chase portal.
The rise of branded cards
Apple is just one of the brands making its way to building a competitive rewards credit card that people will actually want to sign up for and use. These branded cards, aimed at getting consumers to spend on their products, may offer double or triple points (or more). Take, for instance, Uber Visa and the IKEA Visa Credit Card.
Uber Visa, which also partners with Barclays and has no annual fee, gives you 4 percent back on dining and a $100 bonus if you spend $500 in the first 90 days of account opening.
IKEA Visa cardholders can receive 5 percent back in rewards for IKEA related spending, including Traemand installation and TaskRabbit assembly services.
What to know about branded cards
It’s important to note that co-branded cards may carry higher interest rates than bank-only credit cards. However, if you can pay off the balance in full each month, it won’t be an issue.
Also, co-branded cards may issue rewards in their own form of loyalty currency, which can only be spent on their products. Dollars from a bank issued cash back rewards credit card, on the other hand, can be spent anywhere.
Bottom line on the Apple credit card
Though we don’t have all the details yet, I’m not sure it’ll be enough to attract Millennials. But, depending on your goals and where you spend your money most, this may be a good option.
If you want to earn points/miles that go further, consider some of the best credit cards for travel miles. Many of these cards offer the ability to earn rewards on a variety of purchases, some even including Apple products.
Whether Apple decides to keep their rewards structure similar to the existing card they have with Barclays remains to be seen. In the meantime, Apple employees will have a chance to give it a test run before it reaches the masses.
Chase Sapphire Preferred® Card
- Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®.
- Enjoy benefits such as a $50 annual Ultimate Rewards Hotel Credit, 5x on travel purchased through Chase Ultimate Rewards®, 3x on dining and 2x on all other travel purchases, plus more.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
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Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airlines or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities.