Wealth Advisor Rockville, MD
At a launch event on its campus on March 25, Apple announced it would be issuing a new credit card called Apple Card in conjunction with Goldman Sachs, the multinational investment bank.
Following the news, Goldman Sachs CEO David Solomon said that the new jointly-created card is a major step in becoming a player in the consumer finance industry.
In a memo to employees, Solomon wrote, “Apple Card completely changes the credit card experience and is built to help customers lead a healthier financial life. We’re excited to partner with Apple on this card, which is designed to be truly on the side of the customer.”
Solomon added, “This partnership is a major step in the growth of our consumer franchise, furthering our vision to create the leading digital consumer platform.”
Apple Card is being touted by the brand as a simpler credit card that has no fees, powerful integration with iPhone spending tools and boasts rewards if customers use Apple Pay.
According to its website, “Apple Card is a new kind of credit card designed by Apple, and built on the principles of simplicity, transparency, and privacy.”
Like most credit cards, the Apple Card has a high interest rate for people who have a balance with an APR between 13.24% and 24.24%, which will based on individual credit scores. The range is wider than most credit cards, CreditCards.com industry analyst Ted Rossman tells CNBC.
While the Apple Card may not be wisest move for someone with a mediocre or bad credit score, for those with great credit, the Apple Card could prove to be a great deal.
According to a CreditCards.com survey, the national average for interest rates is 17.67%. But the higher end rates suggest that Apple will make the card widely available to those with bad credit but there will be a significant raise in rates.
Rossman said, “I think people in the low to mid-600 range will probably quality for the card. If your score is so low you’re probably not going to get any cards at all. But among people who can get cards, I think this card will be pretty widely available.”
At Apple’s event, the company said its goal is “provide interest rates that are among the lowest in the industry” and to make the Apple Card available to the most amount of people as possible.
There are incentives if you use Apple Pay with the Apple Card as you get two percent back on all your purchases and three percent back on Apple purchases. If you use the physical card itself you only get one percent back.
That may create a bit of a sticking point as only 16 percent of U.S. consumers used a digital wallet, and only 36 percent of merchants accepted digital wallet payments as of 2017, according to a Forrester survey commissioned by JP Morgan.
There are some pluses to the card, including no annual, late, foreign-transaction or penalty fees.
Apple is also claiming that the card is privacy at its best, as it has a special security chip that requires authorization by either Face ID or Touch ID. It also has a one-time unique dynamic security code and the company says Apple will have
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