Against all odds, Apple’s introduction of its “Apple Card” credit card managed to outshine Hollywood’s finest stars at yesterday’s keynote event. Among the card’s nifty features, Apple promised an interest rate among the lowest in the industry.
But is it? Details on the new Apple Card website include the “lower interest rates” in their footnotes. And while they’re certainly not excessive, they’re also not quite as low as you might think.
The website notes that: “Variable APRs range from 13.24% to 24.24% based on creditworthiness. Rates as of March 2019.”
Financial advice website NerdWallet cites the average annual percentage rate (APR) for credit cards from banks at just above 16 percent at the end of 2018. This is based on averages from Federal Reserve data. The Fed average for credit cards used through 2018 was 14.22 percent APR.
As Apple’s small print notes, APR is variable depending on creditworthiness. Simply put: The better your credit score, the lower your interest rates will be. You shouldn’t automatically assume you will pay only 13.24 percent.
As Mashable, which first publicized the figures, notes:
“Now it makes sense why those specific rates weren’t splashed on the Apple theater screen like other perks about the card, like no international fees and 2 percent cash back on Apple Pay purchases. A 24 percent APR is considered pretty high and certainly doesn’t qualify as ‘low.’ The other end of the range is on par with other credit cards.”
Other credit cards (such as those offered by U.S. Bank) offer 3 percent cash back for mobile wallet spending. Apple, by comparison, offers 2 percent back on the amount of a purchase. That increases to 3 percent cash back on Apple products. The reward goes right into your Wallet app.
Still an interesting product
This isn’t to say that the Apple Card, a MasterCard issued by Goldman Sachs, is a bad deal, though. Features like its easy tracking of your spending certainly make it very appealing. So, too, are the lack of fees for things like annual use, international purchases and over-the-limit fees. (Although late or missed payments will, of course, result in additional interest accumulating toward your balance.)
Just be sure you don’t wholly buy into the hype. Make yourself familiar with the small print before using Apple Card.