We scrutinized the terms and scoured review sites
Apple has created a credit card. For people who mainly think of Apple as a computer (or phone) company, this might be a surprise. However, Apple isn’t so much a technology company as it is a brand that sells a particular viewpoint on how things should look, feel and work. So, in principle, an Apple credit card isn’t all that strange. Apple believes they’ve reinvented the traditional credit card but is it a good deal in real life?
We took a hard look at what the Apple credit card offers on paper and scoured sites like Reddit and social media to get a feel for the day-to-day troubles people have run into using this Titanium card.
So if you’re tempted to get in on the shiny new (card-shaped) thing from Apple, read this first to make sure you know what you’re in for.
Apple Credit Card: What’s the Deal?
Why should anyone want to have an Apple credit card instead of a traditional card from established banking institutions? There are a few core value propositions the Apple credit card brings to the table that can be summarized as follow:
- Total integration and dependence on iPhone
- Integration with Apple Pay
- Clear and intuitive dashboard for payments and interest
- Very favorable interest rates (if you can get them)
- Cashback (with higher rates for Apple and partners)
- Interest-free terms on Apple devices
Apart from that, the physical card itself is a typical Apple piece of engineering. Minimalist and made from titanium, the card is unlikely to ever wear out. However, in this article, we don’t care about the physical card, but rather the deal as a whole. So let’s discuss these value propositions in more detail.
iPhone Integration (For Better or Worse)
One unique aspect of the Apple credit card is its reliance on the iPhone. If you don’t have an iPhone, you can’t get an Apple credit card.
The card itself is just an extension of a digital wallet system that exists on your phone. It has no credit card number on it and is virtually blank. The physical card essentially gives you a way to pay if Apple Pay is not available. This means getting 1% cash back instead of 2%. Sure, the titanium card is gorgeous and cool, but it’s not the point at all.
The Interest Advantage of the Apple Credit Card
Apple says that their card is different since it incentivizes you to pay less interest. This seems a little counterintuitive because credit card companies make money from the interest you pay on your borrowed credit.
Apple has gone out of its way to show you exactly when and how to pay to avoid interest on your outstanding balance. You also only pay for the portion of the balance you elect not to pay. This isn’t all that different from how most credit cards work. If you borrow money from a credit card over short periods and pay it back within a certain time frame you don’t accrue any interest.
The main difference here is Apple shows you the numbers that let you minimize interest payments, rather than keeping those hidden out of sight.
The Apple credit card is notable for more than just how transparent it makes interest calculations. Apple is also offering some of the lowest interest rates in the market for a cashback credit card.
While your potential interest rates are pretty low overall, how close you get to the lowest possible interest rate will depend on your credit rating and the algorithm that Apple uses to determine card limits and interest rates.
Speaking of cashback rewards, Apple has a rather unbalanced solution in place. If you buy Apple products or make Apple Pay purchases from partners, the cashback rewards are substantial. If you buy things outside of this partner network, there are cards out there that offer better returns on average.
So whether the Apple credit card is a good deal strongly depends on whether you’re a frequent Apple customer, use Apple Pay regularly, or shop at retailers who are part of their partner network.
The Apple Gadget Advantage
If we’re being honest, one of the main reasons that Apple likely came up with their credit card is so that they can sell more Apple stuff to people. Since you need to own an iPhone to have the card, only people who are already in their ecosystem will qualify.
Apple offers to sell you Apple products using their card at no interest at all. In other words, you’re getting your Apple gadgets at the cash price, but on a payment plan. Not all products are eligible and the maximum repayment period varies, with 24 months being the longest possible.
The Goldman Sachs Connection
While the card is boldly emblazoned with the iconic Apple logo, you’re probably not surprised to hear that Apple hasn’t become a completely independent financial institution. Their card is backed by Goldman Sachs.
While there’s nothing wrong in principle with this move, anyone who is considering applying for their card should know who they are doing business with. There have been stories in the media raising privacy concerns and potential issues of discrimination by algorithms when it comes to determining interest rates.
If you aren’t happy with how Goldman Sachs does business, then you won’t be happy to own an Apple credit card.
Who Is The Apple Credit Card Good For?
Let’s get the main issue out of the way first. If you aren’t already an iPhone user or someone who’s going to be sticking with the iPhone and the Apple ecosystem over the long term, the Apple card simply isn’t worth it. Sure, it has no annual fee, but in reality, the cheapest iPhone costs $400. So make of that what you will.
Since you’d have to first invest in an iPhone, which isn’t cheap, the rewards don’t justify it. If you’re looking for a way to get your Apple fix for the best prices, the card becomes much more attractive. The interest-free payment plans on Apple gadgets are an amazing offer. You also get a further 3% cashback on repayments towards the device.
The same goes for Apple Pay purchases. If you’re already using Apple Pay in your daily life, then the card offers great benefits. If no one in your usual selection of retailers offers it, there’s little reason to use the Apple card.
Another issue that might be a problem for many people is the fact that Apple does not allow for more than one person to be authorized to use the card. So if you wanted a second card for a spouse or child, you’re out of luck without that person buying their own iPhone and applying for their own Apple credit card.
So, to sum up, the answer to the question of whether the Apple credit card is a good deal or not, all you have to ask yourself is whether you love Apple, have or want an iPhone, and have plenty of opportunities to use Apple Pay. If your answer to these questions is yes, then it’s a fantastic deal. If the answer is no, then you’re much better off moving on to something else.