The Apple Card, Apple’s new digital and physical credit card, is a bold, brilliant move that reimagines credit card payments on the iPhone. What makes the move so gutsy has nothing to do with the service itself and everything to do with drawing you deeper into Apple’s ecosystem.
The Apple Card’s benefits sound immediately appealing: Apple promises security measures designed to avoid common avenues of credit card fraud. It gives you up to 3 percent cash back and a visual financial tracker that helps you stay on top of your payments.
The world of payments isn’t new to Apple, which launched Apple Pay, its mobile payment system, in 2014. But a full-fledged credit card, backed by Mastercard’s payment network and Goldman Sachs, represents Apple’s cannonball dive into banking in a way that will have ripple effects for Visa, Google Pay, Samsung Pay and every other digital payment player.
The competitors should pay attention. Apple has an uncanny ability to leverage its cult status to create hype around products and services in a way that compels others to follow, even if they got there first. But it’s Apple’s rival phone brands that should be most concerned — Samsung, Huawei and Google’s Pixel — not because they may want to create their own credit cards (they probably won’t), but because anyone who signs up for an Apple Card is essentially binding themselves to the iPhone for as long as they have the card.
Credit card advice sites such as Credit Karma and Nerd Wallet warn against closing your oldest account, which has the effect of lowering the average age of your credit history. That, in turn, makes it look like you have a shorter history paying down debt than you might actually have, and history is good when you apply for a loan, rent an apartment or put a down payment on a house.
Apple didn’t publicly say it won’t support Android, which would make it available to families or individuals with both iOS and Android devices. But its security setup and home in the Wallet means that it’s iPhone or bust.
If you want to use an Apple Card, you’re using an iPhone. And if your iPhone is tied to your credit card, why would you ever own anything else?