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The brand new Apple credit card is making news by billing itself as a “new kind of credit card.” It debuts this summer, doesn’t charge an annual fee or foreign transaction fee, and is made of titanium. But is it really a new credit card to consider? Let’s break it down.
The Apple Card also brings several unique features that other credit card companies aren’t offering yet including:
- No credit card number or CVV printed on the physical card
- Daily cash rewards up to 3% per purchases
- No annual fee, foreign transaction fee, or cash advance fees
- Payments due on the last day of each month
- The first consumer credit card issued by Goldman Sachs
At first glance, the lack of a credit card number on the physical card is the most revolutionary idea. Your name appears on the Apple Card but you will need to retrieve your card payment details from the Apple Pay app. This is a move that helps protect your card information and also signals Apple’s push to use Apple Pay to complete transactions when you need a virtual card number.
Are these features enough to motivate you to apply for the Apple Card? While this can be a good card for Apple loyalists, it’s worth peeking under the hood to see why this new credit card isn’t worth the hype.
Why the Apple Card is Average
How can the Apple Card only be an average rewards card? After all, it’s issued by Goldman Sachs, is made of titanium, and makes the extra effort to make paying with Apple Pay a rewarding and easy experience.
Other Credit Cards Use Apple Pay
The Apple Card offers higher purchase rewards when you complete purchases using Apple Pay. You can earn 2% back on every Apple Pay purchase instead of the standard 1% back on non-Apple purchases.
Getting 2% back is one of the better cashback rates you will receive on a recurring basis for digital wallet payments.
However, the best travel rewards credit cards already integrate with Apple Pay to complete digital payments using your Apple device. And you may value their purchase rewards more especially if you prefer travel rewards to cash rewards.
Average Cash Rewards
The Apple Card offers tiered purchase rewards:
- 3% back on all Apple purchases (in-store and online when paying with Apple Pay)
- 2% back on all Apple Pay purchases
- 1% back on all remaining purchases
For most daily purchases, you will either earn 2% or 1% back. Excluding the 3% back on Apple-related purchases, these rewards rates are competitive with other rewards credit cards but don’t challenge the status quo.
If the Apple Store, iTunes, Apple Music, and in-app purchases are common expenses, the 3% back can be hard to beat. But other rewards cards can provide more rewards for your daily spending and travel purchases. This is especially so if you use the physical card to complete payments as you only get 1% back.
For instance, the Citi® Double Cash Card earns unlimited up to 2% back on every purchase, even the ones you don’t use Apple Pay to complete. You earn 1% back when you buy, plus another 1% when you pay for your purchases. To earn cash back, pay at least the minimum due on time.
Remember that the Apple Card only rewards 2% back on Apple Pay purchases.
If you prefer travel rewards, the Capital One Venture Rewards Credit Card earns at least 2x miles for every $1 spent. You can redeem your miles for a travel statement credit without a minimum redemption requirement. Two other redemption options include booking award flights and transferring your miles to airline loyalty programs.
More Flexible Rewards Programs Exist
Apple makes redeeming your rewards easy because they deposit daily into on your Apple Cash card within the Wallet app. Daily cash rewards give you the flexibility to spend your rewards as you please on your next purchase.
If you prefer banking rewards points to book award travel, another credit card can help you get more value from your points.
Chase Ultimate Rewards points are some of the most valuable and flexible points you can earn and redeem. With the Chase Sapphire Preferred® Card and Chase Sapphire Reserve®, your points can be redeemed for travel, cash, gift cards, and Amazon shopping credits. Travel rewards are most valuable as you get a travel redemption bonus of 25% with the Sapphire Preferred and 50% with the Sapphire Reserve that makes each point worth up to 1.5 cents each.
Sapphire cardmembers can also transfer their points on a 1:1 basis to some of the best airline and hotel loyalty programs. Some of the transfer partners include Southwest Airlines (which now flies to Hawaii), United Airlines, British Airways, and World of Hyatt. Redeeming your points for award travel can easily help you squeeze at least 2 cents per point which makes them worth more than your Apple Card rewards.
No Signup Bonus
Signup bonuses are a one-time reward and shouldn’t be the only reason you pick a new credit card. But they can be the deciding factor when comparing two credit cards with similar purchase rewards, benefits, and fees.
The Apple Card doesn’t offer any signup bonus. Other no annual fee credit cards offer signup bonuses that can be more flexible.
Of course, you can also find more valuable signup bonuses when you get a rewards card that requires an annual fee. These bonuses can be worth as much as $1,000 when you are able to spend $5,000 in the first 3 months.
To help offset the annual fee, it’s not uncommon for cards to offer exclusive benefits like free hotel nights with each card renewal. Premium rewards cards like the Chase Sapphire Reserve even offer travel credits, airport lounge access, and other perks that can exceed the annual fee cost. Plus, any signup bonus and purchase rewards add extra value.
Whether you’re an aspiring travel blogger, an accountant, an established designer, or anyone else that enjoys Apple products, there’s no doubt that these products continue to be popular for people in various roles. While not having to worry about extra fees is nice and the titanium touch is going to be aesthetically pleasing, the Apple card doesn’t appear to be the card that is going to usher in the next wave of rewards credit cards. There are better options out there that still earn you points for your Apple purchases.
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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.