The Apple credit card is ... fine. Here are some alternatives
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Updated Jan. 9, 2020: The Apple Card, launched Tuesday, launching the technology company into the credit card business.
Apple is getting into the credit card business. The company announced on Monday it's partnering with Goldman Sachs to offer Apple Card, a somewhat obvious extension of Apple Pay, its mobile payment platform. Apple Card is slated to hit the market this summer.
Apple Card appears to be a low-cost rewards credit card. It will offer 3% cash back on Apple purchases, 2% cash back on purchases made through Apple Pay and 1% cash back on purchases made with the physical card, a laser-etched square of titanium with no account number, expiration date, CVV code or signature. (The design, while meant to promote privacy, is also weirdly evocative of disgraced Fyre Festival founder Billy McFarland's Magnises card.)
Apple Card won't have an annual fee or charge cash‑advance, over-the-limit, foreign transaction and late fees. It will carry a variable annual percentage rate (APR) between 12.99% and 23.99%, depending on your credit score.
But don't mistake the forthcoming payment method as a casual addition. Apple Card is clearly designed to incentivize the use of Apple Pay — note the higher rate of cash back on mobile purchases — and sway ambivalent Android users to the iPhone side.
Going off of the currently available terms and conditions, Apple Card is ... fine as far as rewards credit cards go. The no-fee structure, while not entirely ground-breaking, will appeal to people suspicious of plastic as will some of its more notable bells and whistles. In addition to some basic spend tracking tools, Apple Card boasts a feature that shows how much interest you'll wind up paying on any given balance. (Learn how to pay off credit card debt faster.)
But the right credit card for you is largely dictated by your spending habits and if you use one in accordance with best practices — that is, you pay your balance off in full every month — there's other plastic that can give you more bang for buck. One percent cash back is the basic bar a credit card has to pass to enter rewards territory and Apple Card's bonus categories — 2% cash back on mobile payments and 3% cash back on Apple purchases — aren't exactly prime spending buckets for most people.
Plus, premium rewards credit cards tend to come with signup bonuses, extra points, miles or cash back for spending a certain amount of money in a set period of time. Even if it adds a signup bonus, the Apple Card is only be available to iPhone users, presumably with at least OK credit.
If you're currently in the market for a new card, here are some alternative credit cards to consider. (Just don't make this mistake when applying for any of them.)
Annual fee: $550, as of Jan. 12, 2020 APR: Variable 19.24% to 26.24%, depending on your credit Base rewards: Three points per dollar spent on travel and dining; one point per dollar spent on everything elseSignup bonus: You'll get 50,000 bonus points if you spend $4,000 on purchases in your first three months as an accountholder. Why it's worth considering: If you travel frequently, the Sapphire Reserve's perks well outweigh its hefty annual price tag. Cardholders get 50% more value when they redeem for travel through Chase Ultimate Rewards, making that mega-signup bonus worth a cool $750. They also get an annual $300 travel credit and some useful ancillary benefits, including trip cancellation insurance and lost luggage reimbursement.
Annual fee: $0 APR: 0% for the first 15 months; after that, you'll pay a variable APR of 16.24% to 26.24%, depending on your credit. Base rewards: 1.5% cash back on all purchases Signup bonus: You'll get a one-time $150 cash bonus if you spend $500 on purchases in your first three months as an accountholder. Why it's worth considering: No annual fee, flat-rate rewards credit cards are a great option for people who don't like to think too long and hard about gaming the credit card rewards system. Capital One's Quicksilver comes with a competitive 1.5% cash back on all purchases, plus a nice signup bonus to sweeten the deal.
Annual fee: $95 APR: 0% for the first 12 months; after that, you'll pay a variable APR of 14.99% to 25.99%, depending on your credit. Base rewards: 6% (!) cashback on up to $6,000 per year at U.S. supermarkets (then 1%) and streaming subscriptions, 3% cash back at gas stations and transit and 1% cash back everywhere else.Signup bonus: You can get $200 back as a statement credit if you spend $1,000 on purchases within your first three months as an accountholder. Why it's worth considering: The big cashback bonuses on gas and groceries make the card a good choice for large families who have to fill up their cupboards and SUV tanks every month.
Annual fee: $0 APR: 0% for the first 12 months; after that, you'll pay a variable 16.74% to 26.74%, based on your credit. Base rewards: N/A Signup bonus: N/A Why it's worth considering: The Citi Simplicity essentially pioneered the low-cost credit card model Apple is peddling. It charges no late fees, no penalty APR and no annual fee. It also comes with a 21-month 0% introductory APR on balance transfers, one of the longest in the industry.
Ambivalent about mobile payments? Check out our look at whether you should go all digital with your money.
Disclosure: The terms and conditions for credit cards, including interest rates and fees, are subject to change. Be sure to check an issuer's website for the most up-to-date fine print.
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