Apple tries to take a bite out of credit card industry
APPLE is rolling out a credit card that it says is designed to do things no other card can. So how does it actually stack up?
It looks different from a traditional credit card—there’s no number on the front and the users’ name is etched in metal. The card expands the company’s digital Apple Pay services, marrying the physical card to a virtual one and integrating both with the iPhone. And it comes with a bevy of perks—quick signup, elimination of most fees, strong security protections and cash back. But industry experts say they aren’t impressed—the financial benefits mirror many of those already out there for consumers.
Apple says there are no fees associated with the card. That means no late fee, no annual fee, no international fee and no over-the-limit fees. It also said it aims to have among the lowest interest rates in the industry. Users must have an iPhone to use the card, which comes at a cost. But they will earn cash back on their purchases—three percent on Apple purchases, two percent on those with the virtual card and one percent with the physical card.
Apple points out that it is the only card to provide those rewards in real time, so that cash earned can be used immediately.
Apple prides itself on privacy and security, so no surprise, the card sets itself apart here. Apple says it won’t get information on what you buy with the card or where or for how much. And it says your Apple Card data will not be used for any other purposes.
Apple says users will be able to sign up for the card in the Wallet app on their iPhone and begin using it almost immediately. It also tracks spending on the phone in a more user-friendly format, eliminating some of the gibberish that fills a traditional credit card statement. It also includes some budgeting tools, such as tracking spending and providing estimates of how much interest could be charged on a purchase to help people make an informed decision. It allows users to set up weekly or biweekly payments to better match up with their paychecks.
There is still some sense of wait-and-see, as the power of the Apple brand and its fan base is strong. In general, though, credit card industry experts say this is a bid by Apple to expand its Apple Pay services. /