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Apple Card vs Citi, Chase, and Capital One: Is Apple's new credit card as good as it seems?

Should you add it to your wallet?

apple credit card collage 2
Macworld

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Apple might not be turning into a bank, but it wants to handle your money. At its March announcement of Apple Card, we heard a lot about financial health, low interest rates, cash-back percentages, and zero fees. Details were fairly light then, as Apple emphasized the card's simplicity, security, and ease of use while taking broad digs at the competition.

Now that the card has launched, we finally have all the hard numbers, too. Those final details let us stage a proper showdown between Apple and its most popular cash-back rivals, because formidable opponents do exist—as our dive into into the nitty-gritty details of cash-back percentages, interest rates, and fees shows.

Editor's note: This article originally published March 26, 2019. We have updated it based on information now available upon the Apple Card's launch in August 2019.

Apple Card vs the top cash-back credit cards

Among the most popular cash-back credit cards, those with the most similar payouts to the Apple Card are the Citi Double Cash, the Chase Freedom Unlimited, and the Capital One QuickSilver. The Double Cash accrues a total of 2 percent cash back on purchases, while the Freedom Unlimited and QuickSilver give back 1.5 percent. All of the cards here have no annual fee, too, just like the Apple Card.

applecardcomparison aug2019 Macworld

Currently, the Apple Card does not offer balance transfers or cash advances.

As the chart above shows, none of the non-Apple Card competitors are fully fee-free, nor are they all that straightforward. Apple comes out ahead on that front, with clear terms and minimum penalties. It also neatly sidesteps the stickiness of balance transfers and cash advances by not supporting them.

When you dive into the numbers to see how good of a deal the Apple Card is, you'll find that the gap between it and its rivals isn't as wide as you might think. Since the Apple Card is a rewards-based credit card, several key considerations makes the promise of zero fees and lower interest rates less weighty.

apple card app plus physical card Macworld

Purchases made with the physical Apple Card will accrue cash back at a 1 percent rate.

First off, you need an iPhone. Since it's based on Apple Pay, sign-up and storage is done in the Wallet app, which isn't available on any other device, including the iPad.

And then there are the actual terms, which still line up with industry standards. As a rewards card, the Apple Card's variable interest rate is higher than when using a plain, non-rewards credit card. If you can’t pay off your balance in full every month, you won't gain from having a rewards credit card—the extra money you’ll pay in interest obliterates the benefit of the cash you’re getting back. We found several credit unions offering cards with interest rates below 10 percent, so if you struggle to pay your bills on time, check to see if there's one in your area before signing up for an Apple Card.

What's more, if you tend to carry a balance, the Apple Card's lowest interest rate might not matter anyway. Like all cards, the best rates will be reserved for people with sterling credit ratings who pay off their balance every month. And while Apple's rates may start lower than competing cards, at the upper end they cap out similar to the competition, at roughly 25 percent.

On top of all that, other cards offer sign-up bonus rewards and additional perks, which Apple doesn't offer or hasn't touted. The Capital One QuickSilver currently has a $150 sign-up bonus, and the Visa Signature versions of the QuickSilver and Chase Freedom Unlimited come with incidental features like extended warranty protection, purchase protection, and trip cancellation insurance. These benefits can have monetary value if you take advantage of them.

Good deal vs. great deal

apple card summary Macworld

Now that we know all of the Apple Card's fees and interes rates, it's clear how it stacks up against its rivals.

The Apple Card is enticing, thanks to how Apple has packaged it. The easy budgeting tools make it a strong entry to a crowded market, and in desperate situations, it's nice to know that we won't get hit with fees on top of fees. The Apple Card's transparent interest rate and fee structure is among the least painful options out there: Not having to pay a late fee or returned payment fee could make a tangible difference in someone's financial situation.

But while it's a very good deal, we wouldn't say it's the best. You can get more money back in your pocket with other credit cards, especially if you spend heavily on certain categories like restaurants or travel. And if you do your homework, you can find cards with tiered cash-back percentages that will maximize your rewards even better than those mentioned here.

citi costco anywhere info page Macworld

The Citi Costco Anywhere card offers higher cash back than the Apple Card in select categories.

For example, the Discover it Cash Back card offers 5 percent back on a series of rotating categories that includes gas, grocery stores, restaurants, and Amazon, as well as 1 percent on everything else. There's also the Uber Visa card, which also offers high cash-back rate on select categories plus a $100 sign-up bonus: 4 percent on restaurants, 3 percent on hotel and airfare, 2 percent online purchases, and 1 percent everything else. And Costco and Amazon Prime members get plummy options as part of their memberships, with the Citi Costco Anywhere card offering a rich 4 percent back on gas plus lower percentages on other categories like dining and the Amazon Prime Rewards Visa doling out 5 percent on Amazon and Whole Food purchases and lesser amounts for other categories like gas.

With those cards, however, you will of course need to pay close attention to what you buy and where you buy it. The Apple Card is about simplicity, and in that regard, it blows away its competitors. Other apps and sites offer similar features, but none centralize and package them as tidily as Apple does. Alerts, spending trackers, transaction lucidity, and pay-down help are far more crystal-clear, and the 24/7 chat-based support could be a boon for those too busy to make phone calls.

For many iPhone users, an extra point or percent here and there probably won't matter. The experience and convenience will have more appeal, and the titanium card will stand as the ultimate status symbol, even if savvier shoppers are getting bigger rewards checks. That's likely what Apple is banking on. Still, by the numbers, most people can do better than the Apple Card.

This story, "Apple Card vs Citi, Chase, and Capital One: Is Apple's new credit card as good as it seems?" was originally published by Macworld.

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