Apple Card sets the foundation of how virtual credit cards should be

Apple unveiled its virtual credit card, Apple Card, to a select number of users today. The anticipated virtual credit card from Apple allows users to apply and use the new service in the real world.

The chosen selected users were the ones who showed interest in Apple Card by filling out the “Notify Me” form on their website.

If you were one of the selected people that received an invite, users could now activate their Apple Card in the Wallet app today.

Once activated, users will immediately be able to make purchases and transactions through their Apple Card, and also apply for the physical titanium card to be delivered for free.

However, not receiving an invite to the Apple Card Preview won’t leave you out of the experience entirely. The feature will be launching for everyone later in the month — you just have to make sure your device is updated to iOS 12.4 and up for it to operate.

Apple Card is a virtual credit card system that Apple independently developed that’s aimed is to provide the ease of use, accessibility, and comfort of privacy that their brand is famous for.

Apple says that its virtual credit card is not meant to directly compete with premium cards like the Chase Sapphire or American Express Platinum cards.

The goal is to provide a credit card system that’s more accessible compared to other credit card companies by slashing off strict sign up requirements and the ability to accomplish them via your iPhone.

Other than that, Apple has prepared certain features in its virtual credit card system that the company hopes to be a leg up against competitors.

Apple Card has no fees other than the interest rate on balances. Reportedly, Apple fines users between 12.99% to 23.99% on balances. In other words, users will not be charged an additional fee for late payments.

Upon applying for the card, the Wallet app will show your applicable interest rate and credit limit based on your credit rating.

A make or break feature included in the Apple Card is having one of the most simple rewards system available in the market.

Mainly, the virtual credit card’s rewards metrics are accomplished through cashback incentives.

This could be a break if you heavily rely on certain cards to get the most out of your spending. For example, you are using certain types of cards to gain the most travel points from a purchase.

Notably, Apple deems that these types of rewards metrics often become too complicated and too measly to manage. Furthermore, Apple Card is designed to provide a comfortable experience for users who make simple purchases.

In other words, gaining a cashback incentive is an ideal reward system for people who do not spend enough to earn points for a free flight.

Apple’s cashback system is categorized into three:

  • 3% on all purchases from Apple Stores, the App Store, and Apple subscriptions.
  • 2% daily cash on any Apple Pay purchase.
  • And, 1% with the physical card either online or offline.

Users will earn cash rewards from purchases daily, and will immediately transpire in their Apple Cash card balance — usually in less than a day.

Cashback incentives can then be used to pay for other purchases, send to friends and family, or even be used to pay off balances.

Other than the cashback incentives, Apple also has additional features that help users track and get a hold of their spending.

No matter how easy it is, Apple Card is still a credit card and should be treated like one.

The card on the screen has a mechanism that gives you a sort of live heat map of your spending. Different tones represent the trend of your purchases and will be charted in a beautiful array on the on-screen card and will shift and blend according to the kinds of things you buy.

”Spend a lot at restaurants, and the map will take on an orange hue. Shop for entertainment-related items and the card shifts into a mix of orange and pink, ” Matthew Panzarino from TechCrunch described.

Another exciting feature is Apple is pushing users to not pay interest in the first place by paying off their balance on-time through the Wallet app.

There’s an interface that users can personalize so that chunks—between 1-3 markers—can be paid off before interest incur.

On the more physical side of the Apple Card, the titanium card is a credit card that can be used for in-person or contactless transactions.

The card arrives as a minimalistic and straightforward titanium card that doesn’t have an expiration date or security code, and it doesn’t have a number printed on it.

It also comes in a package with an NFC chip that allows users to activate it by simply tapping it on the iPhone screen.

In instances where th titanium card gets compromised, users can request a new card and freeze the old one in the app.

”I got to hold the card itself, and it is very nice, although it is fairly thick and felt a little bit heavier than the typical metal credit card. You can use the card without your phone nearby like any other card, but it doesn’t support contactless payments — Apple wants you to use your phone or watch for that,” Nilay Patel from The Verge says.

Privacy-wise, Apple is promising that it will deliver.

Goldman Sachs is the bank partner for the card. In a sense, users will be using their credit cards but working Apple Card’s system.

Apple says it’s entered into an exclusive privacy agreement with Goldman that restricts Apple Card purchase data from being used for anything other than operating the card itself.

Correctly, the bank absolutely cannot use the data it gathers on transactions to enrich market maps, as chunks of anonymized data, or in any other third-party transactions.

Mastercard and Goldman Sachs can only use the data for operations uses such as credit reporting, remittance, etc.

Meanwhile, Apple itself neither collects nor views anything about where you shopped, what you bought, or how much you paid. All Apple Card notifications and details are all generated and stored on the device.

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