Having already conquered the tech market, Apple is now setting its sights on dominating the world of credit cards. Last month, Apple unveiled the buzzworthy new Apple Card through its partnership with Goldman Sachs. Packed with features geared toward techies and millennials, the Apple Card is bound to make a splash with its target market when it debuts this summer. But are Apple Cards good for credit — or just another gimmick that could drag down your credit score? If you count yourself among those breathlessly awaiting the Apple Card, read on to find out what you really need to know about this innovative upcoming entrant to the credit card landscape.
The Apple Card is being marketed as primarily a digital card that’s integrated with the Apple Pay and Apple Wallet platforms and designed to be used right from your iPhone or Apple Watch. (You’ll also receive a physical card for when a merchant doesn’t accept Apple Pay as a valid payment option.) From the Wallet app, you’ll be able to track your transactions and categorize your spending. Apple is also touting the ease of use for customers, who can schedule payments within the app. There’s an additional benefit of being able to see how much interest you’ll owe based on the payment amount you designate. Even the customer service option can be accessed via text.
What Sets It Apart
The Apple Card professes that it won’t charge any fees — even late fees for a missed payment. You’ll simply accrue additional interest. If you’re a dedicated Apple aficionado, you’ll love the rewards program structure — 3 percent cash back for purchases from the Apple store, as well as 2% cash back for purchases made with Apple Pay and 1 percent for all other purchases. Your cash back — which Apple refers to as “daily cash” — will be automatically applied to your Apple Pay balance, which you can use for purchases or to pay down your Apple Card. Most dramatically, the physical card boasts absolutely no number on it whatsoever — a big boon for security and fraud prevention.
Are Apple Cards Good for Credit?
The interest rate is between 13.24 percent and 24.24 percent, based on individual credit scores. That’s a fairly broad swath that’s in keeping with the industry standard — but keep in mind that those with middling credit will likely be subject to the higher rates. As with most cards, those with good credit will score a much lower interest rate, while the lower-rung consumers could find themselves paying a premium — in the form of a much higher APR — for the privilege of carrying an Apple Card in their wallets.
Is It Superior to Other Cards?
The Apple Card’s novel features and sleek packaging could make it a promising addition to the credit card market. However, the rewards are probably only alluring if you’re a devoted Apple fan or shop with merchants that accept Apple Pay on a regular basis. If neither of those conditions applies to you, you could likely find a much stronger rewards card that caters to your personal interests or needs. As for the other benefits, you probably won’t gain much from the Apple Card — or any similar card with fancy features — if you tend to carry a balance on your credit cards from month to month. The amount you’ll pay in interest will outweigh any of the benefits you’d gain.
While the Apple Card does make plenty of promises, it isn’t the only credit card with fancy features. Plenty of cards offer no annual fees and extend benefits, such as cash back, discounts on travel charges, and extended warranty protection. It’s important to analyze the features in the context of your specific financial situation, as well as the interest rate and credit limit of the card itself. If a credit card will tempt you into excessive spending, it’s not worth it — no matter how salivating its benefits.
Still, if you think you will benefit from the tech-friendly budgeting feature and ease of use within the iPhone, and you’re sure to use it responsibly and stick to your budget, the Apple Card could eventually elevate your credit profile — and the fee-free premise certainly doesn’t hurt.
Stay in the Know
Whether you’re wondering if Apple cards are good for credit, or searching for ways to increase your credit score, we can help at Ovation Credit. Keep up with the latest trends on our blog and while you’re at it, learn how we can assist your credit repair needs here.