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Introducing the New Apple Card

You have to wonder how the bank’s employees feel. Goldman Sachs, the huge New York-based investment bank, devoted an entire department to the launch of the newly-announced Apple Card. Yet Apple chose as a tag line for its advertisements: Apple Card is Here—Created by Apple, Not a Bank.

The Apple Card is actually issued by Goldman Sachs, but what most consumers will see is a digital card that lives in the Wallet app of their iPhones. You can also get a physical card made of titanium, which provides your data on a chip, without having your card number, expiration date, CVV security code or signature displayed on it. (One wonders how its users will make online purchases.)

There is no doubt that the Apple Card represents a step up in convenience. When you’re in the store, you simply display the card on your phone to make the purchase. Your iPhone carries a unique device number, and Touch ID or Face ID will provide the merchant with a one-time security code, with no signature required. Apple will provide weekly and monthly summaries of your spending, displaying (unlike many banks and credit card companies) the merchant names, locations and dates for each transaction.

Apple Card does not have an annual fee. And like many cards, there are cash-back features on all Apple Card purchases. You get 1% cash back when you use the physical card, 2% when you use your phone, and 3% when you buy products and services directly from Apple, including iTunes, the App Store and iCloud storage. The money is actually stored in your Apple Cash account, which can be used to pay off your Apple Card balance.

But also like most cards, Goldman Sachs will collect its pound of flesh on any balances that are not paid off, and it’s clear that, despite the tag line, the bank had a hand in designing how much to charge. The interest rates (depending on your credit score) will range from 13.24% APR up to 24.24%. The national average of all credit cards, according to CreditCards.com, is 17.67%, so people with good credit are getting somewhat of a deal, while those with low credit scores might be better off using a different card.

Also, Apple will charge a 1% fee to make a transfer from Apple Pay Cash to a debit card. People using the Apple Card can send digital money to other iPhone users, which is a relatively new feature in the marketplace.

For all its convenience and the purported independence from the banking industry, the Apple Card is actually not the best deal in the credit card universe. The Blue Cash Everyday Card from American Express gets you 3% cash back at U.S. supermarkets, 2% cash back at gas stations and many department stores, and 1% cash back on other purchases—all with no annual fee. You can also get a welcome bonus of a $150 statement credit if you spend $1,000 within the first three months. The Chase Freedom Unlimited Visa card, also with no annual fee, provides 3% cash back in the first year up to $20,000 spent, with unlimited 1.5% cash back thereafter. Plus it offers 0% intro APR for the first 15 months from account opening on purchases and balance transfers—but the APR is somewhere between 17.24% and 25.99% after that.

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