Apple Card simplifies credit, but it’s not for everyone
Its limitations might deter users despite its consumer-friendly features
After being offered by invitation only for several weeks, Apple on Tuesday made its new credit card available to any U.S. iPhone owner. And while the Apple Card has compelling features that make it easy to see where your money is going — and how much interest a minimum
payment will cost you — it has limitations that could keep many potential users away.
The Apple Card was touted during the company’s Worldwide Developer Conference in June as a simple, secure and data-rich approach to credit. I received one during the invitation period earlier this month, and have been trying it out.
It is indeed a unique approach to using and managing credit. The Apple Card is primarily designed to be used with Apple Pay, the contactless payment system found in iPhones and Apple Watches. It can also be used with newer Macintosh computers that have Touch ID sensors installed. And if your Mac is older, using Apple Pay via the Safari web browser on a site that supports it will let you use Touch ID or Face ID on your phone to authenticate a purchase. It’s pretty slick.
IPhone users can apply by going to the Wallet app and tapping the “plus” button on the upper right of the screen. Choose Apple Card from the type of card to begin the pro
cess. Most of the information needed for the application is pulled from what’s already on your iPhone. The approval process is handled by Goldman Sachs, the issuer of the card, and takes just a few minutes.
Easy to track
You can also have a physical card sent to you for use with merchants who don’t accept Apple Pay. The titanium card has your name on one side and a magnetic strip on the other — and that’s it. There are no numbers or even a signature field, making it more secure in those cases where a merchant — say, a waiter — takes the card away to be swiped. The number and security code for the card can be found in the Wallet app in your iPhone.
And it is the Wallet app that is the key to the Apple Card. It acts like a miniQuicken, providing you with categorized details about the purchases you make and the merchants you’ve patronized.
You also make monthly payments from the app. In fact, the app is the only way to pay your Apple Card bill, via a link to your bank account.
As do other credit cards, the Apple Card gives you cash back on purchases. If you use it to pay for any Apple product or service — from computers to iTunes TV series passes — you get 3 percent back. If you simply use Apple Pay to buy something, that’s 2 percent. If you use the physical credit card, it’s 1 percent. (In its launch announcement Tuesday, Apple said Uber and Uber Eats are now included in the 3 percent tier.) That cash is put daily into an Apple Cash card in the Wallet to spend as you like, or it can be transferred into your bank account.
There are no fees of any kind, whether for late payment or foreign transactions, but you will pay interest if you don’t pay off the balance. The interest rate ranges from about 13 percent to 24 percent, which is set after Goldman Sachs approves your application. The Pay Early button takes you to an interactive graphic that clearly shows you how much interest you’ll be hit with if you don’t pay off the balance, a powerful incentive not to get behind.
Limitations
This is a pretty consumerfriendly approach to credit, but there are some serious drawbacks. In many ways, Apple has not allowed for the way many people actually use credit and manage their finances, particularly those who have been using credit cards for a while.
• There’s no ability to share the card. If you and your significant other are used to joint use of a credit account, that’s not currently possible with the Apple Card.
• There’s no way to get the data from the Apple Card into another money management program. We use Quicken for budgeting and expense tracking in our household, and getting the info from my Apple Card into the software requires manual entry of each transaction. This limitation alone makes me less apt to use the card for anything other than buying Apple products.
• If you lose your iPhone, there’s no simple way to make a payment. You can schedule regular payments, which is some protection against this. Apple recommends using another Apple device with the Wallet app, such as an iPad with Touch ID or Face ID, to make a payment. Or you can go oldschool and call Apple support. But it’s surprising that Apple has not set up a webbased system for working with the Apple Card outside of the iPhone.
Apple is aware these are shortcomings, and you can expect the issues to be addressed in future iterations of the Apple Card. For these reasons, you might want to wait for version 2.0.