Published on March 26th, 2019 | by William Charles56
Five Better Alternatives To The New Apple Credit Card
Yesterday saw Apple release details of the new co-branded credit card it’s launching with Goldman Sachs. As with most Apple products this card is getting a lot of hype and attention, I thought it would be worth pointing out several cards that are better than this card and the reasons why. Before we get started let’s take a look at the basics of the new Apple card:
- Card earns at the following rates:
- 3% cash back on Apple purchases and services (including the app store, Apple Music payments, etc.)
- 2% cash back on all Apple Pay purchases
- 1% cash back when using the physical card
- No annual fee
- No foreign transaction fees
- Will run on the Mastercard payment network
U.S. Bank Altitude Reserve
One of the key selling points for the Apple card is that it earns 2% cash back on all Apple Pay purchases. The altitude Reserve earns 3x points on all mobile payment purchases (including Apple Pay). These points are worth 1.5¢ each when using the real-time mobile rewards future. This means this card effectively earns 4.5% cash back on all mobile payment purchases, more than double what Apple is offering.
The downside to this card is that the annual fee is $400. Keep in mind there are a few things that come with this annual fee:
- Sign up bonus of 50,000 points after $4,500 in spend within the first 90 days
- $325 in annual travel credits
- Priority Pass select membership
The second two benefits you receive on an annual basis and will at least partially offset the annual if not offset it entirely. If you don’t value those benefits at $400 or more then it’s a matter of working out how much you’d spend annually on the Apple card to determine if the Altitude Reserve card is better. For example let’s say I value the travel credits at $260 (80% of face value) and the Priority Pass select membership at $50, the annual fee I’d effectively be paying on this card is $90. This card earns 4.5% cash back vs the 2% on the Apple card. My break even point would be $3,600 in spend, if I spent more than that the Altitude Reserve card would be better than the Apple card. Keep in mind I’m not even factoring in the sign up bonus worth $750.
Fidelity 2% Cash Back Card
Fidelity offers a card that earns 2% cash back on all purchases, this card is issued by Elan services (subsidiary of U.S. Bank). The card also has no annual fee, but it does come with a 1% foreign transaction fee. The upside to this card over the Apple card is that it earns 2% on all purchases (rather than just Apple Pay purchases), comes with a sign up bonus of $100 and also has frequent targeted spending bonuses. You’ll need to ask yourself how many transactions you’ll actually be completing overseas using Apple Pay to determine what card is better.
Citi Double Cash Card
Similar to the Fidelity card listed above but without the sign up bonus. The real value of the Citi Double Cash card over the Apple card is the fact that the Citi DC offers price protection. This means if you make a purchase and then see the same identical item on sale for less within 60 days of purchase Citi will refund the difference. Citi also offers an extended warranty benefit on this card as well.
Alliant Cashback 3%/2.5% Cash Back
The Alliant cashback card earns 3% cash back on all purchases in your first year of being a card member and then 2.5% cash back on purchases from the second year onwards. The card does have a $59 annual fee that is waived the first year. This card also has no foreign transaction fees. From the second year onwards you’d need to spend more than $11,800 on this card to make up for the $59 annual fee compared to a flat 2% cash back card.
PayPal Cashback Card
This card earns 2% cash back on all purchases with no annual fee and no foreign transaction fee. Very similar to the Apple card but earns 2% back on all purchases rather than just Apple Pay purchases.
For the vast majority of people the Apple credit card will not be the best option out there, there are obviously some fringe use cases but the majority of people that sign up for this card will be doing it due to the Apple branding. There is nothing wrong with that, but you should at least be aware that better options exist. If you’re thinking about getting this card I urge you to track how often Apple Pay is actually accepted before applying when it eventually launches.
For a lot of people none of the above cards will even be the best option. To get the most bang for your spend in general you’ll want to focus solely on using your credit card spend to meet minimum spend requirements. We list the best credit card bonuses here. Unlike other sites we do not use credit card affiliate links so we can remain unbiased and recommend the best cards/offers rather than the ones that pay us the most. The other thing worth remembering is that credit cards have very high APRs, so you’ll want to make sure you always pay your credit card in full. If that’s something you don’t feel like you’d be able to do comfortably then you’ll be better off with no credit card at all.