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Comment by elektor | Hacker News Reader

This is a nice card for beginners to credit cards but I don't anticipate a lot of uptake by consumers familiar with the Uber Barclays or Chase 2% cards.

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Can you elaborate? I’m not familiar with these. What are the pros/cons?

As for the Apple Card, I’ve been fairly dismissive of most of Apple’s recent products, but this is the most interested I’ve been in an Apple product since the iPhone. It feels like a similar situation: a “device” that seems simpler to use than existing offerings leveraged off of a partnership with a company that has nothing to lose by playing along with Apple’s game. It might not be the best card offering in terms of features, but it seems like a solid choice for the masses.

Uber has a fairly solid 4% cashback on restraunts, plus some high percentages on hotels and online shopping.

Apple is acting as though their rewards is the most generous reward system ever, period. In reality, it is not even close. For instance, you can trivially get 2% cashback on all purchases (regardless of whether you're using Apple Pay or not) without annual fees:

- Citi Double Cash: unlimited 2% back on everything; regardless of payment method; no annual fee

- Fidelity Rewards: unlimited 2% back on everything; regardless of payment method; no annual fee

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2% is the minimum you should earn on any credit card purchase. There are a bunch of generous rewards cards that offer special cashback rates on certain categories. For instance, the US Bank Cash+ card [0] lets you pick two categories to get 5% cashback on, albeit you're limited to $2,000 in spending per quarter. After that $2,000, you only accrue 1% back. One of the categories is 'Electronics Stores', which includes Apple. In other words, you can get 5% back on Apple purchases (on up to $2,000/quarter in purchases) while the Apple Card offers unlimited 3% back on Apple purchases. There is no annual fee for this card.

The Uber Visa card [1] gets you 4% back on dining and 3% back on hotels/flights with no annual fee.

The Chase Freedom and Discover it cards both have rotating 5% categories (subject to a $1,500 per quarter maximum spend) without annual fees. Meaning, you get 5% back on specific categories on each card which change every quarter. In 2018, the Chase Freedom card had gas stations, internet/cable/phone, Google/Apple Pay, grocery stores, PayPal, gas stations, Lyft, Walgreens, department stores, and wholesale clubs as some of their rotating categories [2]. Also in 2018, Discover had gas stations, wholesale clubs, grocery stores, restaurants, and Amazon as their categories [3].

Admittedly, I believe most of the banks named above charge the "normal" fees that Apple has stated they will not be charging (i.e. penalty APR rates, late fees, etc.). But in reality, responsible users of credit cards were never going to pay those kinds of fees anyway.

[0]: https://cashplus.usbank.com/merchants/index

[1]: https://www.uber.com/c/uber-credit-card/

[2]: https://thetravelsisters.com/chase-freedom-categories-2018-c...

[3]: https://awardwallet.com/blog/discover-5-categories-calendar-...

> Apple is acting as though their rewards is the most generous reward system ever, period. In reality, it is not even close.

I'm looking forward to hearing about how Apple invented rewards in a few years.

Sort of, Apple’s detractors will as usual say something like “Apple and their fans think they invented rewards!” with everyone else looking at them strangely.

> both have rotating 5% categories (subject to a $1,500 per quarter maximum spend) without annual fees

So, $75 of rewards per quarter? That’s not even worth the trouble it would take to apply.

Cash back reduces from 5% to 1% after $1500 is spent that quarter

You're optimizing the spending that you were going to do anyway. For instance, I have to pay the utility bill no matter what; I spend about $3k/year in utilities. I could put that spending on my 2% card and get back $60/year in rewards. Or if I take the time to do my research I could find out that by putting it on my US Bank Cash+ card, I can get 5% back which comes out to be $150 in rewards/year (a gain of $90/year). The only additional work was the 5 minutes to apply for the card, and the 5 minutes/month it takes to log in to the website, pay the card, and log out. A $90 gain / 60 minutes of work per year = $90/hour in "reward income."

In practice, you don't use most of the 5% categories. Whenever a quarter with useless categories comes around, just stick the card into a drawer and check back in 3 months.

You're correct that the ongoing rewards rates are typically fairly anemic overall. The real rewards in credit cards comes from the sign up bonuses. It's pretty easy to get $500-1000 of value by signing up for a credit card and spending $3-5k in the first 3 months of card membership.

Apple is acting as though their rewards is the most generous reward system ever, period

Is it? I don't think Apple is pretending to be the most generous. I think it's trying to be the easiest/most friendly.

There are a lot of ways the Apple card is better than those you list, especially when it comes to fees. But your post is too long for me to bother going through it.

I picked your Uber example randomly.

4% back is great on dining. But it's only on dining. 3% on travel matches Apple. The rest of Uber is 2%, except for some exclusions, which is less than Apple.

Buy music and videos online? With Uber you're capped at $50 cashback per year. And you only get that after you spend $5,000 within 12 months. And then the clock resets.

Too many games. Apple's whole point is to simplify.

Personally, I don't even like the whole cashback thing, but I accept that other people do. I'd rather they just lower my interest rate instead.

Uber's rate is 17.24-25.99%. We'll have to see what Apple comes up with.

If one is borrowing money at credit card level interest rates, the last thing they should be worry about is rewards, and the first thing is figuring out how to fix their cash flow so that they’re not paying credit card level interest rates.

If you're shooting for rewards, there's no point in talking about interest/fees. Interest/fees negates the rewards rate of any credit card many times over. The right way to use a credit card is to put whatever spending you can afford to pay off immediately on the card, pay the card balance, and pocket the 2-5% in rewards. All while not paying anything in fees/interest.

> 3% on travel matches Apple

I'd like to point out that you shouldn't compare 3% on travel/dining spending to 3% on Apple spending. They're not comparable in that way.

> Buy music and videos online? With Uber you're capped at $50 cashback per year. And you only get that after you spend $5,000 within 12 months. And then the clock resets.

You're talking about the $50 statement credit that gets applied only if you spend at least $5,000 in a single year. This credit is in addition to the normal cashback rate (which is 2%). The normal cashback rate on the Uber card is uncapped. 2% cashback is not worth talking about in the age of the Citi Double Cash/Fidelity Rewards card.

> Too many games. Apple's whole point is to simplify.

Credit card rewards systems are convoluted. But you can get modest rewards with minimal effort. I don't think the Apple Card has any value here. If the goal is to actually simplify, just get a 2% card with no annual fee and be completely done with the 1/2/3% cashback tiers.

> Uber's rate is 17.24-25.99%. We'll have to see what Apple comes up with.

The range they've disclosed is 13.24-24.24%. Which isn't really that low in comparison nor overall.

do those have privacy features, and do they promise not to share your purchasing history? (not intended as rhetorical question, if you are a credit card nerd maybe you know of cards that can compete with Apple in this area.) i care about that far more than rewards.

Their privacy assertions are very ambiguous. Apple can’t see your data, but Goldman Sachs can. Apple says GS won’t use it for marketing, but there are many non-marketing commercial uses for the data.

this is true but I am okay with GS having my data and using it for their own nefarious schemes; I am bothered by the idea that it may be shared promiscuously with dozens of data brokers and companies in a personally identifiable form.

That’s just it—the way they describe it, they can use it for nefarious schemes, except marketing.

After Google announced it is buying most consumer's credit card transaction data, privacy promises are something we should all be looking for.

>Google has been able to track your location using Google Maps for a long time. Since 2014, it has used that information to provide advertisers with information on how often people visit their stores. But store visits aren’t purchases, so, as Google said in a blog post on its new service for marketers, it has partnered with “third parties” that give them access to 70 percent of all credit and debit card purchases.

https://www.technologyreview.com/s/607938/google-now-tracks-...

The privacy features are interesting. Unless 100% of my transactions go through the Apple Card or cash though, I am not sure it actually means anything.

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