Should You Get the Apple Card? What to Know Before You Bite

It's not a game-changer, but it does offer some intriguing features. Here's how to know if it's right for you.

Sara RathnerMarch 27, 2019
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With the announcement of the new Apple Card, some fans may have hoped for the reinvention of how we pay for things. But the product's features make it the credit card equivalent of a Red Delicious: relatively ubiquitous and somewhat bland.

Still, despite a crowded market of cash-back cards, consumers may be able to find room in their digital wallets for another one that will earn rewards, especially on pricey Apple purchases.

As with all Apple product announcements (and, really, all credit cards), the important question to ask is: Is this product right for you?

Nerd tip: The Apple Card is issued by Goldman Sachs and is different from the Barclaycard Financing Visa®, which was formerly known as the Barclaycard Visa with Apple Rewards. For information on that card, see our review. (UPDATE: The Barclaycard stopped accepting applications in September 2020.)

Why you might want the Apple Card

The $0-annual-fee Apple Card earns 3% cash back on Apple purchases, as well as at select merchants and through select apps, and 2% back on everything else — but only if you make your purchases via Apple Pay on your iPhone. If you use the physical version of the card, which is an option at retailers that don’t accept Apple Pay, you’ll earn only 1% cash back.

It's unclear what kind of credit scores you'll need to qualify for the Apple Card, but assuming you are creditworthy, you might benefit from this card if:

1. Apple juice runs through your veins

Siri is your spirit guide. Every device in your home, car and office comes from the Apple store (which, coincidentally, is where you hang out on weekends). Getting 3% cash back on your numerous Apple purchases would be a big boon, and for all other purchases, you're already well accustomed to waving your phone over the point-of-sale device at checkout. Here's a quick look at the current Apple Card rewards categories:

REWARDS

CATEGORIES

3% cash back

• Apple Pay purchases made directly with Apple (including Apple stores, within the App Store and for Apple services).

• Uber and Uber Eats purchases via Apple Pay.

• Walgreens and Duane Reade purchases via Apple Pay.

• In-store T-Mobile purchases via Apple Pay.

• Nike purchases via Apple Pay (in U.S. stores, via Nike.com and on Nike apps).

• Exxon and Mobil gas station purchases via Apple Pay. This includes fuel, car washes and convenience store purchases.

• Panera purchases via Apple Pay.

2% cash back

All other purchases made via Apple Pay.

1% cash back

All purchases made with the physical Apple Card.

2. You crave instant gratification

Apple says you can apply for the card through the Wallet app on your iPhone in minutes, and you can begin using it the moment you're approved. No need to wait seven to 10 business days to get a card in the mail. Similarly, when it comes to earning and redeeming your cash back, rewards are credited daily and can be used more or less immediately. Unlike many other rewards cards, you don't need to wait until your billing cycle closes.

3. You live in, or travel to, cities with widespread Apple Pay acceptance

Apple claimed in announcing the Apple Card that 70% of U.S. retailers accept Apple Pay. Certainly, as of this writing, several major merchants do accept it (or are in the process of rolling it out), including Target, McDonald's, CVS and Best Buy. It's also worth noting that the Apple Card has no foreign transaction fees, and Mastercards are widely accepted around the world, so in general it will make a decent travel buddy.

4. You want simplicity in your rewards card

Aside from the card's elevated rewards rate on Apple purchases, there are no other bonus categories to keep track of. As long as you make your purchases via Apple Pay, you'll earn a rich rate back on everything you buy. So if you're not into optimizing rewards by juggling multiple cards to earn higher rates on specific purchases, the Apple Card could work well for you. Everything you need is right there on your phone — even tech support, reachable via text message.

5. You're occasionally forgetful

Apple says you won't be charged a penalty rate or a late fee should you miss a payment. The company does, however, note that "late or missed payments will result in additional interest accumulating toward the customer’s balance." Regardless, NerdWallet recommends making payments in full and on time because late payments can still hurt your credit scores.

Why you might pass on the Apple Card

The 2% cash back on most purchases matches many of the highest flat-rate cash-back cards on the market. But it comes with a big asterisk, because you must use Apple Pay to get elevated rates. The physical card earns just 1% back on purchases, and that's just not competitive when the industry standard is 1.5%. (In addition, you don't get the physical credit card automatically; you must request it separately after your application is approved.)

Here are some reasons the card may not make sense for you:

1. You're an Android user

To use Apple Pay, you must have an iPhone model that can support it (typically iPhone 6 or later). If you're committed to a different mobile wallet, such as Samsung Pay or Google Pay, consider instead the Citi® Double Cash Card – 18 month BT offer. It pays 2% cash back on all purchases: 1% when you buy and 1% when you pay — and you can add it to the digital wallet of your choice.

2. You want travel rewards

Dreaming of a big sign-up bonus that can net you a free flight? The Apple Card doesn't offer that. A travel rewards card can, though. The $0-annual-fee Bank of America® Travel Rewards credit card, for example, earns 1.5 points per dollar on all purchases, not to mention a plum of a sign-up bonus. If you’re willing to pay the $95 annual fee, the Chase Sapphire Preferred® Card earns 2 points per dollar on travel (you'll earn a total of 5X points on Lyft rides through March 2022) and restaurant purchases and 1 point per dollar spent on all other spending. There's a great sign-up bonus, too. Points are worth more when redeemed for travel through the Chase portal, and you can also transfer your points to multiple airline and hotel rewards programs.

3. You shop primarily at stores that don't accept Apple Pay

Some major retailers, including Walmart, don’t accept Apple Pay. And while Costco does, you can only use Visa cards there; the Apple Card runs on the Mastercard payment network. This is to say nothing of the much smaller merchants where you may run into issues: Food trucks, mom and pop stores, bodegas and others simply may not be equipped to handle Apple Pay.

4. You spend heavily in specific everyday categories

You may pony up for a new MacBook Pro once every few years, but if your everyday spending is focused primarily on a specific area, other cash-back cards may make more sense. Maybe you have a large family and do the bulk of your spending on groceries and gas. The Blue Cash Preferred® Card from American Express earns 6% cash back at U.S. supermarkets, on up to $6,000 a year in spending (then 1%); 6% cash back on select U.S. streaming subscriptions; 3% cash back at U.S. gas stations and on transit (including such things as taxis, rideshares, parking, tolls, trains and buses); and 1% cash back on all other purchases. Terms apply. Or perhaps you hit the town regularly? The Capital One® SavorOne® Cash Rewards Credit Card earns 3% cash back on dining and entertainment, 2% back at grocery stores and 1% everywhere else.

5. You’d like to add an authorized user or finance a large purchase outside of the Apple brand 

For now, the Apple Card doesn't allow you to include others on your credit card account. And while the card does feature interest-free financing options for multiple Apple-branded devices and accessories, there’s no introductory APR offer on other kinds of purchases. With APRs ranging from 10.99% to 21.99% as of March 2020, this is not an ideal card if you need to carry a balance. A card with a lengthy 0% intro APR offer on all purchases would be a better option.

You could also consider the Barclaycard Financing Visa®, which offers "special financing" on Apple purchases for six to 18 months depending on the amount of your purchase. (Note that these are deferred interest offers, not true 0% intro APR offers in which interest is waived. You'll want to ensure you can pay the entire balance by the time the promotional window ends.)

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