Apple Card Review: Experts About the New “Apple” Credit Card

Apple Card Review: Experts About the New “Apple” Credit Card

At the presentation on March 25, Apple has introduced several new products: News+ news aggregator, Arcade gaming platform and Apple TV CHANNELS and TV+ video service. But most importantly, the company has announced its own credit card. Apple CEO Tim Cook stated that it would be one of the largest innovations “over the past 50 years.” In any event, one thing is clear: the company changes its strategies and sets its sights on the banking sector, and the monsters in the payment market, such as PayPal, JPMorgan, Barclays, Citibank and others, cast a wary eye at the developments.


Apple Card: What is It?



Apple Card is a virtual credit card created by Apple with the support of Goldman Sachs and Mastercard. In the words of Apple Pay vice president Jennifer Bailey, the card will help the users “lead a healthy financial life”, keep track of their spending and spend money wisely.


According to Tim Cook, Apple Card will work anywhere in the world where Apple Pay is supported. Cashback for purchases made with this card would be charged daily (Daily Cash): 2% of the total amount and 3% for any purchase in Apple Store and spending for “apple” services. The application will allow you to track statistics on expenses: purchases are automatically distributed based on categories, and places where they were done are marked on the map. The Apple Card is different from our usual credit cards: it will not have a CVV and any open number; it will be with no expiration date. The Card is designated to a device and can be accessed via Face ID and Touch ID.


The company has also presented the Apple Card in the form of a physical credit card made of titanium. Cashback thereon will be less: 1% only (the rest will be used to pay fees to intermediaries.) The card itself will not have any number, any security code, any signature, it will have only its holder’s name. It will work only together with iPhone: a one-time code will be received on the smartphone to confirm the transaction.



Tim Cook’s statement about special security standards, which the company undertakes to comply with, was a key point of the presentation: first of all, the data on purchases should be handled with care and securely stored on their users’ devices. Neither advertisers, nor marketing agencies will get access to those data. Even Apple would not possess information about what the customer bought, how much he spent and in which store. All the statistics will be processed directly in the smartphone.


How Much Servicing Costs?


Servicing is free of charge. No commission for delay in payment and for international payments is provided for. The rate on the card will vary from 13.24% to 24.24%.


When It to Come into Service?


In the USA, it will be possible to issue an Apple Card this summer. It remains to be seen when the card is available in Europe.


What Experts Think About Apple Card



The news that the company is developing a credit card jointly with Goldman Sachs came out in February 2019. At that time, MoffettNathanson analyst Lisa Ellis told Bloomberg that she doubted that Apple’s new product would break new ground, as there were many similar cards on the market and they all have their own target audience to which they offer favourable terms of servicing. Moreover, major companies often hearten their users by generous bonus programs, which are not known yet at Apple. Finally, Lisa Ellis added that “Apple fans” would definitely like the new credit card.


A similar opinion was expressed by Robert Armstrong in his article for the Financial Times, which was published after the announcement of the new “apple” product. He emphasized that despite Tim Cook’s big pronouncements, the new credit card (he referred to the titanium one.) had no unique characteristics, except for an attractive design and no expiration date. Mercator Advisory and Aite Group research companies’ experts were equally in the opinion that many people have already had credit cards which suit them by all their parameters, therefore, it would be not easy to convince them to switch to the Apple Card.



“Every time when Apple makes ambitious statements, the company tries to surprise everyone and to reinvent something,”  NerdWallet specialist in financial product analysis Sara Ratner commented the new card. “I do not know,” she continued, “whether they succeeded in reinventing credit cards…”

The chief industry analyst at CompareCards stated that most often customers look for a card with a low rate or a big number of bonuses; it does not matter for them whether Apple logo is engraved thereon or not. A card would gain popularity only if the company offers its users the most beneficial conditions on the market.



But not all are critical of the new Apple financial and technical product. Harshita Rawat, analyst at Bernstein, noted in her interview with  Bloomberg that mobile payment should strongly “evolve” to draw attention of customers, who are accustomed to ordinary plastic cards. According to her, the new Apple product is a big step forward in doing so, but much work remained to be done. “The size of this step has yet to be determined,” John Grand, payment practice manager at Accenture consulting company, continued the thought.


Alex Patsay, cyber security specialist, argues for the Apple Card. For example, free banking and no fee commission are rarity in the United States, usually cards cost between $100 and $400 annually. Against the local banks’ offers, the Apple Card terms look pretty attractive. At the same time, Apple does not mention other bonuses, which credit cards of the well-known banks offer, whether a discount on hotel reservation or getting insurance. “And so, it is still early for conventional banks to be concerned,” Alex Patsay concluded.


Apple to Grapple with Crypto?



Many are convinced that the company’s desire to release as many new products and services as possible is driven by its wish to make money against the background of a decline in iPhone sales. Others believe that Apple wants to convey to the global community an idea of the need to change over to digital payments. In this context, the issuance of Apple’s own cryptocurrency does not seem to be a utopian dream. The company has already undertaken to compete with banks and payment systems so that its customers could make purchases quickly, easily and without extra fees. The cryptocurrencies pursue the same goal. It cannot be ruled out that in the future, the Apple Wallet would be able to store not only credit cards, but cryptocurrencies and tokens. Luke Martin, digital currency market analyst, shares this opinion.


In general, crypto enthusiasts speak of the Apple Card differently: some say that the new card will “kill bitcoin”; others believe that bitcoin is created to free people from the banks’ high-handedness, and the Apple Card – to make its users their debtors.


Forward into the Past



Few people know that Apple made its own plastic cards even before it became the mainstream. In 1986, the company issued two cards: consumer card and business card. The ceiling of the latter was $2,500. Business card holders could bring their old computers Apple Lisa or Macintosh X to a store and buy new models with a discount. The issuance of the cards was stopped in the 1990s.