In brief
Apple announced plans to launch its own credit card in partnership with Mastercard and Goldman Sachs earlier this week, a new digital service and physical card which the company claims can help customers lead a “healthier financial life”.
What is Apple Card?
Apple Card is both a digital service and a physical, titanium credit card. The latter is designed to be used when Apple Pay, the company’s contactless payment system, is unavailable.
While we’re here, what is Apple Pay?
Apple Pay was first announced in September 2014, and uses near-field communication (NFC) technology to make payments on contactless terminals or online using Apple devices. Chip and pin technology, while widespread in the UK, does not exist in the US, meaning many tech-savvy Americans rely on mobile payment systems like Apple or Google Pay to make quick and easy tap transactions, instead of swiping a card. Apple Pay has been used for 10bn transactions to date, Tim Cook, Apple chief executive, said during the Apple Card launch on its Californian campus.
Cool. So how does Apple Card work?
Apple Card is nested inside Wallet, the pre-installed iPhone app which stores credit or debit cards linked to Apple Pay, boarding passes for flights and other digital passes. Those interested in applying for one can do so through the app, and can expect an approval or rejection within minutes, Apple confirmed during the launch event on Monday.
Much like Monzo, transactions are ranked into categories such as Shopping, Entertainment and Food & Drinks, which are also colour-coordinated to provide an at-a-glance summary of the kind of things you’ve been buying on any given day.
Users can access weekly and monthly spending summaries, which it says will highlight correlations and spending patterns users may find helpful in developing healthier financial habits.
Transaction information is kept secure using the Secure Element security chip present in Apple Pay-compatible iPhones, and payment are authorised using either facial recognition system Face ID or fingerprint scanning feature Touch ID.
Pending payments are visible within the app, alongside the date they’re due and a list of recent transactions. Transactions can also be pinpointed using Apple Maps, which can help to jog your memory with a location if you’re unsure about a payment you’ve made.
What about fees?
Users aren’t charged annual, late, international or over-the-limit fees, even when payments are missed – although interest on the balance will continue to build up at the usual rate. Apple says it wants to provide interest rates “among the lowest in the industry,” claiming to be the first credit card “that actually encourages you to pay less interest”.
If a user is unable to pay off their monthly balance on the last day of the month, the system estimates how much the interest would cost, and also encourages “you to pay a little more than you normally would, and help you pay off your balance faster”. It’s also possible to set up weekly or bi-weekly payments around when you get paid, to chip away at the overall amount owed more quickly.
What are the rewards like?
The card offers a cash back rewards scheme called Daily Cash, which adds money to a separate Apple Cash card each day, which can be put towards purchases using Apple Pay. There’s no limit on how much cash you can accrue, and it can be spent like cash.
Users will receive 2 per cent Daily Cash on purchases made using Apple Pay on the card, 3 per cent on purchases made directly with Apple and 1 peer cent on in a shop, website or app which doesn’t yet take Apple Pay.
Tell me more about the titanium card…
Where Apple Pay is not accepted, the user can apply for and use a titanium physical spending card, which does not feature the owner’s card number, CVV security code, signature or expiration date, which Apple claims makes it more secure than other physical credit cards. Instead, only the owner’s name is laser-etched onto the front. A virtual card number is generated for use from within the Wallet app, and it autofills forms for payment when you’re making a payment through Apple’s Safari browser.
Is it coming to the UK?
While Apple confirmed the service would launch in the US from the summer, it’s believed to be planning a UK launch at some point in the future. How can I contact Apple once I’ve got one? The company offers support services via text message.
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