What Is the Interest Rate on the Apple Card?

A low rate does not a revolutionary product make

Apple Card

Apple has a new credit card coming out, and while it’s not a ground-breaking product, it’s certainly a contender to dominate the cash-back credit cards space—among iPhone users. The flashy rollout on Apple’s website and at the March 25 launch event in Cupertino, Calif., framed the card as a weapon against high-interest credit card debt, without offering any debt-shattering tools.

VP of Apple Pay Jennifer Bailey initially referred to the card’s APR in vague terms, saying it will be “very competitive.” The fine print on Apple Card’s legal page lists the APR as a variable 13.24%-24.24%, depending on the creditworthiness of the applicant.

How Competitive Is It?

A 13.24%-24.24% APR is pretty low for a rewards credit card. Its low end of the range isn’t the lowest out there, but it’s close. However, the card isn’t available yet, so who knows where the competition will be once the card comes out this summer.

As of the new Apple Card announcement, the company’s other co-branded rewards card, Barclaycard Visa with Apple Rewards, carries an APR of 16.24%, 22.24% or 28.99%. And when you look at the Apple Card’s rewards and comparable rewards cards, yes, the APR is lower than its competitors.

Here’s a closer look: The Apple Card offers 3% Daily Cash on Apple purchases and 2% Daily Cash on purchases made with Apple Pay. Other purchases made without Apple Pay earn 1% Daily Cash. The main competitor to these rewards is the Citi Double Cash Card, which offers 1% cash back on purchases and another 1% on those purchases when you pay your bill. The Citi Double Cash has a 15.74%-25.74% variable APR on purchases.

But we’re still talking about double-digit, compounding interest here. Whether you’re paying 13.24% or 15.74%, it’s not worth financing your purchases for 2% or 3% cash back. (And that’s if you have excellent credit. Cardholders with lower credit scores will pay higher rates.)

Tip:

If you’re looking to finance large purchases with a credit card, look for a card with a 0% APR introductory period, and make a plan to pay off your balance within that intro period.

What About Apple Card’s Other Features?

Apple also touted the card as “the first credit card that actually encourages you to pay less interest.” Apple claims this because there’s a slider functionality within Apple Wallet that allows you to see how much you can save by paying more toward your card balance.

It’s great to have this interactive feature within what is essentially a credit card statement. It’s not revolutionary, because credit card calculators throughout the internet help you figure out the same thing, but having the tool and your debt information in one place could make it easier to make smarter decisions about your credit card payment. It also has a beautiful design, which most credit card calculators lack.

But as far as being a pioneer in encouraging people to pay less interest? That argument doesn’t hold up. Again, look at the Citi Double Cash: It encourages you to pay your statement quickly, because you don’t get your second 1% cash back until you pay your credit card bill. There are also credit cards available with lower ongoing interest rates than Apple Card’s low-end rate, and there’s a slew of cards offering 0% APR introductory periods on new purchases. Apple Card has no introductory rates. And in place of late fees—the Apple Card boasts its no-fee policy—people who miss Apple Card payments could see additional interest added to their balances.

You can read more about the additional features in our full Apple Card review.

The Bottom Line

Apple Card has some attractive benefits for Apple Pay users (read: iPhone users), and the most qualified applicants will get a great interest rate. But the company’s claim that the card is leading the industry in encouraging people to pay less credit card interest isn’t as impressive as it sounds.