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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.

The new Apple credit card, expected to be rolled out sometime in 2019, will offer cardholders extra features with Apple Wallet. These include being able to set goals, track spending, view rewards points, and manage accounts. But big banks and FinTech companies are already offering these features, so will it be enough to get picky Millennials to sign up?

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 (2% cash back).

It’s also comparable to the Chase Freedom Unlimited Card. The Chase Freedom Unlimited® comes with the ability to earn 3% cash back on all purchases in your first year of account opening, up to $20,000 spent. After that, you will earn an unlimited 1.5% cash back on all purchases. Both cards are on our list of The Best No Annual Fee Credit Cards for 2019.

Other similar cards include the Wells Fargo Cash Wise card that gives 1.5 percent back on purchases. The card also doesn’t have an annual fee.

Pro tip: If you spend frequently on dining, check out the new 60,000 Chase Sapphire Preferred that earns 2x points per $1 spent at restaurants worldwide. It also has zero foreign transaction fees.

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.

Claire Tak

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Apple’s New 2% Back Credit Card: Will it Lure Millennials to Sign Up?
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