Cashing In Q&A columns

New Apple Card: Innovative features, but are the rewards worth it?

Hardcore Apple fans might benefit, but results are mixed for others


If you’re an Apple aficionado who can use Apple Pay for most of your purchases, the Apple Card might yield high rewards. Here’s what you need to consider.

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Dear Cashing In,

Is the Apple Card that was recently announced a good deal?

I have a couple credit cards that I like, but I’m not sure how they compare to the new Apple Card.

Is it worth it? – Taylor

Dear Taylor,

As you would expect anytime Apple introduces a new product, there is a lot of buzz around the Apple Card, which the company announced in late March 2019.

When Apple does something, you can bet it will attract attention. The card was even mocked on “Saturday Night Live.”

Check out all the answers from our credit card experts.

Ask Tony a question.

See related:  Best cash back cards of 2019

Apple Card: Features, fees

The Apple Card, offered in partnership with Goldman Sachs, is an intriguing offering for a number of reasons:

Fees. It will have no fees. Not just no annual fee, which is a common credit card feature, but no late fees, fees for international charges or high-interest rate penalties for late payments.

Privacy/security. As with other products, Apple is trying to brand itself as security-conscious, and the Apple Card will have several security features you could soon see imitated elsewhere. The card itself will have no full card number, no CVV code and no expiration date or signature. That feature will help prevent fraud. Those details, when needed, will be available electronically.

Apple Pay/iPhone integration. A lot of the features of the physical card will be pushed to the Apple Pay app, to take advantage of security features that are easy to use.

Titanium card. The physical card is a heavy-duty card that looks pretty slick. Usually, those cards are available only to people who pay a high annual fee.

Apple Card: Rewards structure

All those features make the Apple Card interesting as a new product. However, when you look at the actual rewards on the card, they are far less intriguing.

Here’s the rewards structure:

  • 3 percent cash back on Apple purchases (and Uber and Uber Eats, added Aug. 20, 2019).
  • 2 percent cash back using Apple Pay.
  • 1 percent cash back on all other purchases.
  • Cash distributed daily or monthly as statement credit or into cash account.

If you are thinking about the Apple Card just on the basis of its rewards, it’s pretty clear that they are unspectacular. They follow the formula of a lot of cards: 1 percent back on most purchases, with category bonuses for certain types of spending.

As with most cards of this type, determining whether the rewards on this card make sense for you depends on how much you figure you will spend on the category bonuses.

For now, at least, the rewards on the card seem to make the most sense for people who spend a lot on Apple products and will be able to use Apple Pay frequently.

Apple Card: The Apple Pay factor

The key might really be the availability of Apple Pay around you.

Apple says that by the end of 2019, 70 percent of U.S. retail locations will accept Apple Pay.

If you find yourself using Apple Pay a lot, then the average reward you receive will be close to 2 percent cash back, which is a solid reward rate and competitive with cards such as Citi Double Cash Card, which offers a flat 2 percent cash back – 1 percent when you charge and 1 percent when you pay your bill on time.

However, there are probably a lot of places where you spend money that will continue to not accept Apple Pay, such as smaller, independent retailers or online merchants.

If you shop a lot at those places, the card will probably earn you fewer rewards than many other cards on the market.

Clearly, part of Apple’s hope in introducing the card is that customers of merchants who do not accept Apple Pay will start asking those locations to find a way to incorporate Apple Pay, which is known in sales as a “pull strategy” – getting your ultimate customer to demand a certain product.

That, of course, benefits Apple and people who use the Apple Card.

There will be a number of Apple loyalists who will sign up for the Apple Card because of the company’s cool factor. But for now, the rewards seem meager except for the most hardcore Apple fans.

Editor’s note: This column was updated Aug. 20, 2019 to reflect the addition of Uber and Uber Eats as a 3 percent cash back category on Apple Card.

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Published: April 1, 2019

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