Apple (AAPL -0.60%) wants to control your wallet. The tech powerhouse inserted itself into how people spend money when it launched Apple Pay, and now it's taking the next step with its new self-branded credit card.
It's important to note that while the company calls Apple Card a credit card (it's a Mastercard issued by Goldman Sachs) the physical card is actually secondary. This new product is really Apple's attempt to make Apple Pay more relevant and useful by adding a credit component.
Apple wants to change how people use credit and spend money by routing payments through their iPhones. It's a bold play that may work if the company can deliver an easy-to-use credit card alternative that solves traditional pain points in the credit payment system.
To see whether the company delivered on its promises, I applied for an Apple Card and have put the product through its paces.
What's it like to get the Apple Card?
Applying for the Apple Card is shockingly easy. iPhone users simply go to the Wallet app on their phones, tap the "+" button in the upper right-hand corner, and choose the Apple Card option on the menu that opens. You are then asked for basic info including name, date of birth, email, and phone number (you have to use the info that corresponds to your Apple ID).
After that, you are either denied or receive an offer of a credit card line with Apple showing you your proposed credit line, interest rate, and the fees you have to pay (none). If you accept, the card then appears for use in Apple Wallet immediately and a physical card shows up in the mail about a week later (with the company letting you know when it's on its way and when it arrives).
Using the card is very easy. It can be your default Apple Pay choice or an option you use sometimes. Once my card was approved, I immediately used it to purchase a new MacBook from Apple.com. Once that order was accepted, I was instantly awarded 3% cash back in Apple Cash -- the company's take on peer-to-peer payment.
Apple Card offers varying rates of cash back. You get 3% on purchases made directly from the company, 2% on anything where you use Apple Pay, and 1% back on purchases made using the physical card. This is where Apple hits its first snag, as while I knew Apple Cash existed because a friend had paid me back $20 using it, that $20 has been sitting in the Wallet app for months as I'm not precisely sure how to use Apple Cash aside from peer-to-peer uses.
I tried once to use it to pay at a vending machine, but it was not accepted, making me wary of using it in a store. It's actually pretty easy to transfer this money to a bank account or to use it in stores, but I had to look up how to do that online, so using Apple Cash is not quite as intuitive as the rest of the Apple Card experience.
The physical card arrived a little less than a week after my approval, and it's a heavy, metal credit card with my name, the Apple logo, and the Mastercard logo. It has no card number on it. Finding the number/expiration date/security code required an internet search as to where that info is hidden (it's in the Wallet app and takes two clicks).
Using the Apple Card
You can manage your Apple Card through the Wallet. Adding payment info is intuitive and about as simple as typing in your account and routing number. The card offers some fairly neat expense tracking tools that color-code your payments by what you bought.
The most innovative feature comes when it's time to pay your bill. Apple does not merely show you a minimum payment; it shows you the amount you can pay to avoid interest charges. In my case, if I paid off one-third of what I owed, I would not be charged interest that month.
This tool helps people avoid paying more than they need to while also making it so you don't have to pay off a large expense in a single month. It's sort of an interest-free loan from Apple that might serve as a bit of a safety net for people hit with a large, unexpected bill.
It's well done, not revolutionary
Apple has delivered a consumer-friendly credit card that's transparent when it comes to the cost of your money. It's very well integrated into the iPhone, and it makes sense for any Apple phone users to consider getting one.
The technology company hasn't revolutionized how people use credit cards, but it has removed some pain points. Apple Card takes something where the goal has generally been to maximize card issuer revenue and made it more about meeting customer needs. That's admirable and useful for many people, myself included.