The Apple Card is great (playing devil’s advocate)


a person holding a credit card

Earlier this week Apple announced their first ever credit card: Apple Card.  They declared Apple Card to be “the most significant change in the credit card experience in 50 years.”

And the world yawned.

3% cash back for Apple purchases, 2% for Apple Pay purchase, and 1% everywhere else.  No annual fee.  Not revolutionary.  Unless you regularly pay Apple a ton of money, you’ll do better with a no annual fee 2% cash back card.  Or better yet, pair that 2% cash back card with the no annual fee Uber card which offers 4% cash back for dining and 3% for travel.

My original plan for this post was to tell people which card (or cards) to get instead of the Apple Card.  But that’s less fun than trying to make a case for the Apple Card.  Still, let’s get that out of the way first:

  • If you want a no-annual fee cash back card, get a no-fee 2% cash back card such as the Citi Double Cash.  Optionally pair it with the no-fee Uber card (4% dining, 3% travel).
  • If you spend a lot via Apple Pay (or Samsung Pay or Google Pay) and you spend at least $325 per year on travel, then get the US Bank Altitude Reserve.  This card offers 3X on travel and 3X on all mobile wallet payments, including Apple Pay.  Points are worth 1.5 cents each towards travel or 1 cent each towards cash back.  If you redeem points only for travel, it’s like getting 4.5% back on all Apple Pay spend.
  • If you want transferable points or other types of rewards, see our post “Best Everywhere Else Rewards Cards” for many examples of cards that earn the equivalent of 2% back or better.

It’s actually pretty cool

Here’s the part where I pretend to love the card and argue why it really is cool and revolutionary.

Instant gratification

Apple promises that if you’re approved for the card you’ll then be able to use the card immediately.  And when you earn cash back rewards, that cash back is also available to you immediately.

A card in the cloud

a blue sky with clouds

I’m intrigued by this part.  The card is almost entirely virtual.  The physical credit card is optional.  And it’s numberless.  It can be used to pay for things wherever a physical card is required, but it’s otherwise irrelevant.  The Apple Card is primarily intended to be used with Apple Pay.  If you need a credit card number to make a payment (for online purchases, for example), Apple Card will automatically generate a virtual card number for you.

I’ve always been intrigued by the digitization of our analog world.  Apple Card seems to me to be the first serious push (in the United States anyway) towards eradicating physical credit cards.  And hopefully it will hasten adoption of payment terminals that accept mobile wallet payments.

No fees (almost)

Apple describes the card as having no fees.  That’s different from saying no interest charges.  It does have those.  Still, the lack of fees is truly noteworthy:

  • No annual fee.  There’s nothing special about that.  Many cards offer the same.
  • No international fees.  That’s good, but again many other cards offer the same.
  • No cash-advance feesStop the pressesWhat?  Does this mean that you could go to a bank or ATM and withdraw money without incurring cash advance fees?  That would be amazing even if you didn’t earn rewards on those transactions.  I mean I can’t think of any card that does anything like that.  At the very least it would be a great way for people to get currency when visiting foreign countries if they don’t have a fee-free debit card. My guess is that the answer is no, you won’t be able to use the card for cash withdrawals.  I’m not even sure if they’ll have a PIN available for ATMs or chip and pin transactions.  I guess we’ll find out when the card is released.
  • No late payment fees, No over-the-limit fees, no returned-payment fees: Even those of us who fully intend to pay in full and on time every month mess up every now and then.  Most banks will forgive a first offense if you call and plead your case.  But this is special in that you don’t have to do anything to avoid those fees.  They simply don’t charge them.  Don’t forget, though, that you will have to pay interest when you fail to pay your balance in-full by the end of the month.

Privacy & Protection

Apple claims that they won’t have access to information about your purchases.  Plus, while the card issuer (Goldman Sachs) will have access to that data, they have promised to use that data only to operate the card.  They say they will never share or sell your data to third parties for marketing or advertising.

Even better than the privacy aspect, in my mind, is the things they’ve put in place to stop fraud.  Virtual account numbers for online charges is a great step in itself.  Plus, you get an alert on your phone every time it’s used to make a payment.  It should be really easy to know when someone has stolen your card.  And if they take your phone, the card will be safe unless they also take your finger or face, depending on which type of biometric security your phone uses.  If a thief takes your finger or face you’ll have bigger things to worry about than having to contact Apple to dispute a charge.

My thoughts

As a rewards card, the Apple Card is a snoozer.  There are many, many more rewarding cards.  But hold on.  The ability to earn great rewards is not everyone’s top motivation.  Apple Card might just be a great choice for select Apple fans, especially those who use Apple Pay often.  Consider these scenarios:

  • If you’re geeked out by an almost entirely virtual card, then this might be for you.
  • If you know that you occasionally incur fees despite your best intentions, then this might be for you.
  • If privacy and security are important to you, then this might be for you.

OK, so the card is more evolutionary rather than revolutionary.  And, it’s not great as a rewards card (but not terrible if you use it mostly for Apple Pay).  But it is special in a number of ways.  The card promises to deliver instant gratification; to eliminate fees; to excel at privacy and security; and to push the world further towards digital wallet acceptance.

I’ve almost convinced myself…  but not really.  Rewards are my thing.  Apple, call me again when you unveil the Apple Card XS with 3 times the rewards of the no fee Apple Card…

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Has there been any word or indication what the estimated credit limits would be on this card (I know, it’s early)? Other than a pretty physical card, I can only see this card of being any use as a no-AF way to add more available credit to boost one’s credit score.

Otherwise, into the sock drawer it goes. It sure is pretty, though. (dammit, CEO Tim Cook! He knew the Apple/Tiffany/blingy effect would work on simple-minded people like myself…)

Andrew B

Is there any two percent, no annual fee, no foreign transaction fee, physical card available, without having to have a bank account or brokerage account with the issuer. That is what I could use.


The Paypal CashBack Mastercard: 2%, no annual fee, no foreign transaction fee. You do need a Paypal account though. Personally I’d rather not give Paypal any more business than I have to.


So the “cool” factor is there in spades, but nothing offered in terms of fees, rewards, or protections you can’t find in another card…just maybe not all in the SAME card.


Oh…mah…gawd…y’all!!! Apple just invented “the credit card!”…(wipes away tear)


Hoping this is just the starter card to be used mainly as in-store financing option to test the waters, and that they follow it up with a premium offering that has benefits attached (maybe AppleCare for devices purchased with card, Apple Music subscription included, discount on upgrade program, bonus % on trade-ins, etc. in trade for an annual fee). They have plenty of options for adding benefits to cards from their existing products/services to compete with offerings from current issuers. Also, while we don’t see value in this card because our wallets are full of better options, younger people may be making their largest yearly purchases from Apple in the form of phones, computers, or devices. For them, this is a no-fee option to finance those purchases at a theoretically attractive rate directly from Apple. There aren’t a whole lot of young people with the ability to pick up Altitude or that are carrying the Plat/Gold/Blue trio and maximizing MR, and I think that’s what Apple is targeting here. For that matter, there aren’t a whole lot of experienced card users that can show an Altitude and the MR trio (or Chase trio if that’s your thing), so the market may be bigger than we think for this card. For a new card user, it is hard to beat 3% cash back on that new laptop without at least some research and planning; Altitude in store and Prime through Amazon are the only two that immediately come to mind without getting into portals and store categories that would be outside the scope of knowledge of a hypothetical Apple Card user. So I do think a valid case can be made for this card, just not to us.


Correct. The market for this card is huge. It’s not best in class for much, but it’s very good in class for a lot.


I wonder about the antitrust implications. Will apple use its leverage to take advantage? Pretty tempting for most corporations…


I think you’re missing a huge potential benefit of the Apple card, which is that it should force other card issuers (and maybe Google/Samsung Pay) to up their game to compete. iPhone users make up about 45% of US smartphone users, and we can assume that Apple will have a big marketing campaign for this as they do with all their products. The result should be that the general population, including people who don’t care much care about credit card rewards or Apple products, will be impregnated with the idea that 2% cash back and no foreign transaction fees is the new minimum standard in a rewards credit card. All other card issuers will have to offer something equal or better. Cards like the Capital One QuickSilver (which I’ve used in the past for its 1.5% cash back *and* no foreign transaction fee, but was considering closing even before Apple’s announcement) just become obsolete for anyone with an iPhone. Other no annual fee rewards cards from Chase (e.g. Freedom Unlimited), Citi (e.g. DoubleCash) and the like may have to drop their foreign transaction fees and/or increase their rewards above 2%.

In short, every bank issuing credit cards in the US suddenly has a new, big, and powerful competitor which already has their product literally in the hands of a huge percentage of Americans. If they want people to continue using their products, they need to compete.


Good point about restaurants. Hopefully this will help increase the acceptance of mobile wallets, and bring about a new practice of being able to pay at the table with handheld contactless readers, like you see everywhere in Europe. Letting someone take your card out of your sight, with plenty of time to note the card info, is a terrible practice from a card security perspective.

Vincent Pascual

There’s another card that not many people know about that would be very competitive: the State Department Federal Credit Union (SDFCU) Premium Cash Back+. 2% cash back on all transactions, no annual fee, no foreign transaction fee, and no balance transfer fee. The card is also Chip-and-PIN preferred, if you answer “Yes” on the application question about whether you will be traveling abroad frequently or you live abroad. Another consideration: the card is a Visa, while the Citi Double Cash and Apple Card are both MasterCard. Some merchants accept Visa but not MasterCard (e.g. Costco). On the flip side, the only merchant I’m aware of that accepts MasterCard but not Visa is Kroger.

If you have one of the 2% cash back cards, (including Citi DC, SDFCU, and Fidelity if you deposit into one of their brokerage account), you’ll get the same 2% on Apple Pay as the Apple Card. Plus, you’ll get 2% everywhere else whereas Apple Card only earns you 1%. The 3% Apple purchases category on Apple Card is helpful for any spending on iTunes and the App Store, and this seems to cover iCloud storage and services such as Apple News+. The 3% also covers Apple Store purchases. However, I think this spending category would not be my largest one, which means that that extra percent would not make up for the 1% from the non-Apple Pay purchases that I bet would be the majority of your transactions. You can also use iTunes gift cards if you purchase them with a Chase UR points card that earns 5%/5x such as the Freedom (depending on the quarterly category) or Ink Cash to cover iTunes/App Store/etc. purchases. And any major purchases from an Apple Store (e.g. iPhone) may not enjoy additional purchase or warranty protections if paid for with an Apple Card as opposed to a card like Citi DC that provides an extended warranty of 2 years and Citi Price Rewind.

As someone who is a long-time Apple fan and who follows the credit card space closely, I think the Apple Card isn’t your best bet and you would do better with one of the 2% cards.


Yes the CEO of BAC came out and said no big deal here .


Thanks, Vincent! That’s another 2% no FTF card to add to my list of possible replacements for the Capital One QuickSilver. I’ll also mention the PenFed Power Cash Rewards Visa (requires a checking account with PenFed for the 2%), which I believe is a contactless card. Do you know if the SDFCU card is contactless? Since contactless is mandated to be accepted at all POS terminals in Europe by the end of 2019, I think the PIN vs. signature priority will become a moot point, as when paying by contactless neither ever seems to be required (at least in Europe under certain amounts). Ultimately it doesn’t matter too much if a card isn’t contactless since I can add it to my mobile wallet, but it’s nice to have it built in to the card.

Vincent Pascual

I’m glad I can help, Kent! I have the card and it is not contactless. However, I do use it with Apple Pay. I did forget to mention that in order to get the SDFCU card, you have to open a savings account with them. I believe you will also need to open a checking account in order to have a place to deposit your cash back rewards. I had also considered the PenFed card, but I passed because it is signature priority. That said, PenFed’s other products seem to be compelling, such as their Premium Online Savings account.


I did some reading on reports about the SDCFU Premium Cash Back+ card, and it seems a lot of people have been denied, for various reasons, but including too many new credit cards in the previous year. Do you know how many new (less than a year old) cards you had prior to applying for that card?

Vincent Pascual

I applied for the SDFCU card at the beginning of this month (March 2019). In the 12 months right before I applied, I had 3 new cards (I was approved for the first one at the end of February 2018). The next card came in April, and the one after that in December. I opened an SDFCU account in December and it became my primary institution for banking. Based on the myFICO forums and other comments I could find, I thought it would be best for me to wait a year before applying for the card. Since I have a European vacation coming up very soon, it made sense for me to take a chance and apply for the SDFCU card. I’m glad I did. But YMMV.


I still get asked to show my card when I make a big purchase even if I use mobile pay.

A lot of Americans are idiots.




You may not get charged a CA fee but you’ll still incur interest immediately on money you pull out so it’s still a crap option…just slightly less crappy.


Just making the assumption based on how all cash advances work:

A cash advance on all cards I can think of carries either a 3% or 5% origination fee depending on issuer and interest begins to accrue immediately. Apple Card is waiving the origination fee. They didn’t say they were giving you a grace period on interest for cash advances.


Confirm this is how Penfed Amex works. I have used it many times in Hong Kong for cash from the ATM. So no fee for taking cash out and interest starts immediately. However their interest rate is fairly low 9-12% and I don’t take out much cash really…then I pay it off when I get back to the USA. So it’s only a few days and generally costs less than $5 or so. I used to make sure I had a chunk of cash available in my most foreign friendly bank account, email their vp (local credit union) to turn off the fraud detection, eat the 1% fee, buy a gift card for the vp for the hassle of it all. So that was a lot of work. Now I just do a trip notification for penfed and pay off the balance on return. Then when my statement cuts the interest is charged and I also pay that off. Otherwise I don’t use that card much. And I will say it’s an Amex, so I have to use specifically the Aeon machines to get cash…ie won’t work at random ATMs.


The great thing about a card like this for cash advance fees is this:

1) Get cash and don’t pay a fee
2) Log in and pay it off immediately

You’ll pay essentially no interest and that’s a better deal than most bank debit cards. It’s not “free” in that you lose the float on whatever you’re charging. But if you don’t have a Schwab ATM card (or equivalent) it can be a very good deal to use cash advance in this way — especially when it’s fee free.