One of the most buzzy announcements on Apple’s stage this week was Apple Card, its in-house credit card powered by Goldman Sachs and Mastercard. Consumers, tech press, financial press and Wall Street were all intrigued for various reasons.
But there are still a ton of questions around the way it works mechanically, the terms involved for consumers and its overall benefits. Though I’m not a financial reporter, I did used to cover payments and I’m a huge points hound. Some of the benefits (and caveats) of Apple Card are worth examining a bit more.
In some ways, Apple getting into the credit card game was one of the tech world’s biggest finally’s. Once Apple launched Passbook, it became extremely clear that it was headed towards this end game, with stops along the way for loyalty cards, coupons, external credit cards and ticketing.
This week, we got to see what Apple thinks is a solid ‘version 1’ of its credit card offering. Yes, this is a V1, and Apple is going to be iterating on the concept with new features and benefits.
The basics
The basics of Apple Card are pretty straightforward. We’ve already posted the basics here so I won’t go over them at length. It’s a virtual card and physical card that can be used for both regular and Apple Pay purchases at any place Mastercard works. The app companion categorizes purchases automatically, shows you where they were made and has a design that makes it easy for you to see interest charges, spending and cash back. The physical card offers 1% cash back, the virtual card offers 2% cash back on Apple Pay purchases and 3% back on purchases of Apple products. The cash back is delivered daily to your Apple Cash balance or to the card monthly as a credit balance if you don’t have or want an Apple Cash account.
But beyond those basics, there are still a lot of questions about some aspects of the way the card works. Here are some interesting bits.
Activating a physical Apple Card will happen with a tap of the iPhone to the card. The activation takes place with a pop up view of the card and an activation button, similar to the pairing process of AirPods. You can see signs of this in the current beta.