FILE- In this Monday, March 25, 2019, file photo, Jennifer Bailey, vice president of Apple Pay, speaks about the Apple Card at the Steve Jobs Theater during an event to announce new products in Cupertino, Calif. Apple is hoping a credit card will entice more iPhone owners to use Apple Pay. (AP Photo/Tony Avelar, File)

FILE- In this Monday, March 25, 2019, file photo, Jennifer Bailey, vice president of Apple Pay, speaks about the Apple Card at the Steve Jobs Theater during an event to announce new products in Cupertino, Calif. Apple is hoping a credit card will entice more iPhone owners to use Apple Pay. (AP Photo/Tony Avelar, File)

Apple tries to take a bite out of credit card industry

Apple says there are no fees associated with the card

Apple is rolling out a credit card that it says is designed to do things no other card can. So how does it actually stack up?

It looks different from a traditional credit card — there’s no number on the front and the users’ name is etched in metal. The card expands the company’s digital Apple Pay services, marrying the physical card to a virtual one and integrating both with the iPhone. And it comes with a bevy of perks — quick sign-up, elimination of most fees, strong security protections and cash back. But industry experts say they aren’t impressed — the financial benefits mirror many of those already out there for consumers.

___

WHAT DOES IT COST?

Apple says there are no fees associated with the card. That means no late fee, no annual fee, no international fee and no over-the-limit fees. It also said it aims to have among the lowest interest rates in the industry. Users must have an iPhone to use the card, which comes at a cost. But they will earn cash back on their purchases — 3 per cent on Apple purchases, 2 per cent on those with the virtual card and 1 per cent with the physical card.

“I’m underwhelmed,” said Ted Rossman, industry analyst at Creditcards.com. “People will sign up for it, but that will be mostly because they love Apple, not because this card is better than anything that already exists.”

He points to the Citi Double Cash card, which offers an easy-to-use 2 per cent back on any purchase. Or the U.S. Bank Altitude Reserve Visa Infinite card, which offers 3 points per dollar on mobile-wallet spending —worth 3 per cent cash back or 4.5 per cent off travel. Rossman said even another branded credit card, the Uber Visa card, comes out on top with 4 per cent cash back on dining purchases.

READ MORE: The good, bad and the unknown of Apple’s new services

Apple points out that it is the only card to provide those rewards in real time, so that cash earned can be used immediately. Other companies often make users wait a statement cycle or until the bill has been paid. But WalletHub CEO Odysseas Papadimitriou is dubious people who can afford an iPhone and qualify for the card will need that cash so quickly. He also reiterated that there are better rewards out there, particularly for people with strong credit.

“There are other cards that have better rewards and no annual fee,” he said. “There is a healthy market there, so from that perspective there is nothing unique.”

A note on the interest rates as well — the card doesn’t come out until summer but Apple has said that as of March, the variable annual percentage rate on the card could be anywhere from 13.24 per cent to 24.24 per cent based on creditworthiness. That’s right in line with the rest of the market, Rossman said.

___

WHAT ABOUT SECURITY?

Apple prides itself on privacy and security, so no surprise, the card sets itself apart here.

The physical card has no numbers so purchases are made with the embedded chip and the digital version lives in your Apple Wallet on your phone, where it’s protected by fingerprints or facial recognition. That means that even if someone steals your phone, they won’t be able to use the card to buy things.

Apple says it won’t get information on what you buy with the card or where or for how much. And it says Goldman Sachs, which Apple is working with to provide the card, will use your data only to operate the card — such as help with purchases or fraud protection — but your Apple Card data will not be used for any other purposes.

READ MORE: Apple details new magazine, news app at services event

Even critics concede that the Apple Card technology provides a new layer of protection not available with other cards. And mobile payments, such as Apple Pay, are generally more secure than traditional credit cards.

However, consumers already have zero fraud liability with credit cards, said Papadimitriou. Federal law limits a consumer’s fraud liability to $50 but all the major credit card networks — Visa, Discover, American Express and Mastercard — provide zero liability for consumer cards. Apple is working with Mastercard to create the Apple Card. So, he said, the added protection may be more perception than reality for most.

___

HOW EASY IS IT TO USE?

Apple says users will be able to sign up for the card in the Wallet app on their iPhone and begin using it almost immediately. It also tracks spending on the phone in a more user-friendly format, eliminating some of the gibberish that fills a traditional credit card statement.

It also includes some budgeting tools, such as tracking spending and providing estimates of how much interest could be charged on a purchase to help people make an informed decision. It allows users to set up weekly or biweekly payments to better match up with their paychecks. While these perks are nice, there are similar budgeting tools on other cards and the information only incorporates purchases and payments for Apple Pay and the Apple Card, so it’s not providing a full financial picture. All the same, Apple users often enjoy the seamlessness of having the information at their fingertips.

There is still some sense of wait-and-see, as the power of the Apple brand and its fan base is strong. In general, though, credit card industry experts say this is a bid by Apple to expand its Apple Pay services. While Apple Pay is the most common of mobile-wallet payment services, only 13 per cent of smartphone users have tried it, according to industry tracking site PYMNTS.com.

“Apple makes great software, but I’m not sure they truly understand consumer needs on this,” Papadimitriou said.

___

Sarah Skidmore Sell, The Associated Press


Like us on Facebook and follow us on Twitter.

Just Posted

(Advocate file photo)
Red Deer down to 102 active COVID-19 cases

Central zone has 332 cases with 26 in hospital and five in ICU

Photo Courtesy of the Town of Sylvan Lake
Multiple edible parks found throughout Sylvan Lake

Apple trees, berry bushes and more have been planted in various parks around town

Curtis Labelle. (Photo Submitted)
More exciting music to come from Sylvan Lake’s Curtis Labelle

Curtis Labelle has been called Canadian Elton John or Billy Joel by fans

The Government of Alberta identified 115 new COVID-19 cases Sunday, bringing the provincial total to 3,089.
(Black Press file photo)
Red Deer COVID cases continue to fall

114 cases in Red Deer, down one from Saturday

Maskwacis Pride crosswalk (Left to right): Montana First Nation Councillor Reggie Rabbit, Samson Cree Nation Councillor Louise Omeasoo, Samson Cree Nation Councillor Katherine Swampy, Samson Cree Nation Councillor Shannon Buffalo, Samson Cree Nation Chief Vern Saddleback.
Pride in Maskwacis

The 4th inaugural Maskwacis Pride crosswalk painting took place on Saturday June 12th, 2021

People watch a car burn during a riot following game 7 of the NHL Stanley Cup final in downtown Vancouver, B.C., in this June 15, 2011 photo. THE CANADIAN PRESS/Geoff Howe
10 years ago: Where were you during the 2011 Vancouver Stanley Cup Riots?

Smashed-in storefronts, looting, garbage can fires and overturned cars some of the damage remembered today

(Black Press Media file)
Dirty money: Canadian currency the most germ-filled in the world, survey suggests

Canadian plastic currency was found to contain 209 bacterial cultures

A worker, at left, tends to a customer at a cosmetics shop amid the COVID-19 pandemic Thursday, May 20, 2021, in Los Angeles. (AP Photo/Marcio Jose Sanchez)
Half of cosmetics sold in Canada, U.S. contain toxic chemicals: study

Researchers found that 56% of foundations and eye products contain high levels of fluorine

Annamie Paul, leader of the Green Party of Canada, speaks at a news conference on Parliament Hill in Ottawa, on June 10, 2021. THE CANADIAN PRESS/Justin Tang
Green Leader Annamie Paul facing no-confidence motion from party brass

move follows months of internal strife and the defection of MP Jenica Atwin to the Liberals

Tulips bloom in front of the Supreme Court of Canada in Ottawa, Thursday, May 10, 2018. Day two of a full week of scheduled hearings will be heard in Federal Court today on a case involving Indigenous children unnecessarily taken into foster care by what all parties call Canada’s “broken child welfare system.” THE CANADIAN PRESS/Sean Kilpatrick
AFN slams Ottawa for ‘heartless’ legal challenge of First Nations child compensation

2019 decision awarded $40,000 to each Indigenous child removed before 2006

A health-care worker holds up a sign signalling she needs more COVID-19 vaccines at the ‘hockey hub’ mass vaccination facility at the CAA Centre during the COVID-19 pandemic in Brampton, Ont., on Friday, June 4, 2021. This NHL-sized hockey rink is one of CanadaÕs largest vaccination centres. THE CANADIAN PRESS/Nathan Denette
‘Vaxxed to the max’: Feds launch Ask an Expert campaign to encourage COVID shots

Survey shows that confidence in vaccines has risen this spring

Children’s shoes and flowers are shown after being placed outside the Ontario legislature in Toronto on Monday, May 31, 2021. THE CANADIAN PRESS/Frank Gunn
Ontario commits $10 million to investigate burial sites at residential schools

Truth and Reconciliation Commission identified 12 locations of unmarked burial sites in Ontario

Two hundred and fifteen lights are placed on the lawn outside the Residential School in Kamloops, B.C., Saturday, June, 13, 2021. The remains of 215 children were discovered buried near the former Kamloops Indian Residential School earlier this month. THE CANADIAN PRESS/Jonathan Hayward
Days after Kamloops remains discovery, Tk’emlups families gather to unite, move ahead

‘We have to work together because this is going to be setting a precedent for the rest of the country’

In this Saturday, May 29, 2021, file photo, people crowd the Santa Monica Pier in Santa Monica, Calif. California, the first state in America to put in place a coronavirus lockdown, is now turning a page on the pandemic. Most of California’s coronavirus restrictions will disappear Tuesday, June 15, 2021. (AP Photo/Damian Dovarganes, File)
With COVID tamed, it’s a ‘grand reopening’ in California

No more state rules on social distancing, no more limits on capacity, no more mandatory masks

Most Read