Apple, which changed the world with the iPhone a little over ten years ago, newly announced the Apple Credit Card. This would be a “new kind of credit card”, bundled with a handful of new subscription services, such as the Apple TV+ service. Apple wants to be, not only a hardware company, but also a fully-fledged service suite.
By Lexie Ehlers
Apple’s CEO Tim Cook said that tech company’s new credit card will be “the most significant change in the credit card experience in fifty years.” The card, which will push users toward Apple Pay, offers various spending rewards and security features. Apple’s first credit card will release this summer in partnership with Mastercard (MA) and Goldman Sachs (GS), the issuing bank. The card will be built into the iPhone’s Apple Wallet app, but a physical, laser-etched titanium card will be optional. The card has no annual or foreign transaction fees, and it will allow users to track spending by category on their phones. Users of the card will receive cash back daily.
Customers may apply for an Apple Card directly in the Wallet app. They can start using it immediately if they are approved. A number of other apps already help people categorize their spending and manage their budgets, but Apple has the advantage by providing a friendlier user experience.
One aspect which is less likely to attract new customer is the rewards scheme. Companies including JPMorgan Chase and Citi used sign-on bonuses and rewards on dining and travel to lure in new customers. Apple’s offerings are only 3% cash back on Apple purchases, 2% when using Apple Pay, and 1% when using the physical card. Apple’s decision to stay out of the rewards wars could be a smart move, since one-upmanship has proved expensive for other firms.
On security, Apple offers benefits, though the underlying technology is not new. Apple already relies on two-factor authentication for Apple Pay, which right now allows users to put other credit cards in their digital wallet. You are required to be logged in from your own device and greenlight a purchase with a face ID or a fingerprint.
The Apple Card’s success would be a positive development for the company. This credit card will help the tech giant move away from being specifically a hardware company and more towards a multiple function service in consumers’ lives.