Apple Credit Card Review
I’ve been getting tons of ads to sign up for the Apple Credit Card so I did some research into the rewards.
No Annual Fee
As a millennial who only spends money to feed and clothe and entertain herself, the exciting cards are the ones you can earn cash back on without an annual fee. Once your spending categories hit a certain level, the cards with an annual fee can be worth it because you have access to higher percentages on cash back categories and the fee will be covered.
No Late Fees
This is just jargon. You will still be hit with “additional interest” if the card is paid late.
No Welcome Bonus
This sucks. Most cards have a bonus for signing up. For example, the Discover It card gives you UNLIMITED first year cash back match and other cards will give Bonus Miles and Cash Back Bonus for meeting spending balances in the first few months.
3% Cash Back on Uber/Uber Eats (with Apple Pay)
This is the most exciting reward that the Apple Credit Card offers. You can find travel cards with rewards for ride share services that exceed 3%, but you’ll see a minimum $95 annual fee. Therefore, a travel card with 5% would earn less cash back for $3,000 on Uber purchases than this Apple card would earn with 3% on $2,000. But remember: All purchases must be made on your Apple card through Apple Pay. As you can see from the graph below, the Apple card is the best choice for earning cash back on Uber purchases if you are spending less than $5K per year on Uber.
Travel card with $95 annual fee and 5% cash back on Uber vs Apple Card 3% cash back on Uber
3% Cash Back on Apple Products
(Purchased on your Apple Credit Card, through Apple Pay, and at an Apple retailer)
The 3% cash back on Apple purchases isn’t something I care too much about. It seems like Apple is simply trying to increase the amount of payments processed through Apple Pay and move sales of Apple products away from third party sellers and into their own online and brick and mortar retail stores.
Above Avalon reported earlier this year that of Apple’s billion customers, 62% spend an average of $260 per year on Apple products. This makes sense considering how many people only upgrade their iPhone every 3 or 4 years. Then 18% spend an average of $25 per year and 20% spend an average of $500 per year. Unless you are spending a ton of money on Apple products annually, the 3% is not going to get you far… You could probably end up with more purchasing power by purchasing the product from a third party store at a discount with a card that earns 1.5% or 2% cash back.
3% Cash Back at Walgreen’s (using Apple Pay)
Cash back on Walgreen’s purchases using Apple Pay is interesting… almost random. It looks like Walgreen’s wants tap in to Apple’s customer base and give everyone a reason to not just go to the CVS across the street instead. Even if you are a big convenience store shopper, I’m not sure this Apple reward would be a reason to sign up. Especially when you could earn 5% cash back on Walgreen’s, CVS, and grocery stores during the months of Jan-March 2020 if you are using Discover’s “Discover It” card.
2% Cash Back on all Apple Pay Purchases
This is in every category, with no limits - BUT YOU HAVE TO USE APPLE PAY
1% Cash Back on all purchases made without using Apple Pay (card swipes)
Who cares if the card is pretty if you only earn 1% once you pull it out of your wallet? This is really low for a credit card. The industry standard is about 1.5%
Summary
I can see this being a decent first time credit card for someone who uses Apple Pay, spends a decent amount of money on Uber, and purchases Apple products every year. If you already have a credit card that is earning cash back and Apple’s reward tiers do not fit your spending habits, you probably don’t need to sign up for this card.
