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Apple’s New Credit Card Doesn’t Have Any Hidden Fees – Or Does It?

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Apple’s New Credit Card Doesn't Have Any Hidden Fees, Does It?

So, Apple is getting into the credit card business with what it calls a truly game-changing take on the credit card. But is Apple’s claim that the card has no hidden fees accurate?

Well, no!

In fact, Apple might well have announced the most-expensive hidden fee in the history of credit cards!

This Article Will Cover

First, Let’s Go Over What Apple’s New Card Offers

Apple launches its new card this summer, in partnership with Mastercard and Goldman Sachs, the bank will issue the card. The card exists virtually on your iPhone, though you can request a physical, titanium metal card if you wish. And given the status of metal cards – and the idea of flaunting a sleek Apple card – I’m betting the vast majority of cardholders will request the physical card.

Apple says the card will charge no annual fee and no foreign transaction fees and will offer a cash back component: 3% on Apple products; 2% when using Apple Pay; and 1% when using the physical card. Plus, you’ll get cash back daily that you can use immediately.

As well, the Apple card offer will rely on two-factor authentication for Apple Pay, which currently allows users to store their other credit cards in the digital wallet on their iPhone. To make a purchase, an Apple cardholder will need to log into their phone and approve the purchase with a face ID or a fingerprint.

Apple says the card will offer a cash back component: 3% on Apple products; 2% when using Apple Pay; and 1% when using the physical card.

And that right there tells you that the Apple card has what I’ll bet is the largest hidden fees in the credit card world. You have to own an iPhone to use the card!

No iPhone – No Card For You

So just to join the party you have to go buy an iPhone if you don’t have one.

And not just any iPhone, you need an iPhone with face ID or fingerprint technology. Sure, the iPhone 5s and 6 have fingerprint technology, but early betting is that you will need at least an iPhone 8 to use an Apple card — maybe an iPhone 7 at the oldest.

I know many people still using an iPhone 5 or 6. For them to use the new Apple card, they’d likely have to upgrade to a more expensive phone.

That is a fee, pure and simple!

It Gets Worse

The entire history of iPhone – the entire history of modern technology – has been planned obsolescence, that is  designing products with the underlying idea that new versions will not support older versions, thereby necessitating that consumers spend more money to get the new version.

At the end of the day, a credit card is primarily to buy things without the need for a wad of cash or the time-consuming need to write a check. To that end, you have far-better options than the Apple card and the largest hidden fees in the business.

The picture shows a range of Apple's brand-logos

Apple reportedly is already looking to dump the iPhone 7 later this year in terms of support. So that means at some point, an iPhone 7 user with an Apple card will be forced to upgrade to a new phone. And with new iPhone models having now cracked the $1,000 threshold … well it’s pretty obvious Apple might not be charging an annual fee directly to have an Apple card, but the consumer is going to pay a very real cost.

A $1,000 iPhone X is more than a decade’s worth of $95 annual fees! Or roughly two years of annual fees for the American Express Platinum card or ten years of annual fee for the credit card Capital One Venture Rewards. Both of them are valuable metal credit cards with lucrative bonuses.

Best Credit Cards with Bonuses from our Partners

INTRO APR on Purchases
0% (up to 14 months)
INTRO apr on Balance Transfer
0% (up to 14 months)
Regular APR
SEE SITE
Annual Fee
$0
Bonuses & Rewards
  • April 2019: Best Credit Cards with Bonuses
  • Clicking "Apply Now" will take you to the Credit-Land.com website to view card offers
  • Earn Flexible Miles or Cash Back
  • Offers Available for Excellent and Good Credit
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If You Want A True No-fee Credit Card, Then Consider One Of These

Capital One VentureOne Rewards: Enjoy a one-time bonus of 20,000 miles once you spend $1,000 on purchases within 3 months from account opening, equal to $200 in travel. 1.25X miles on every purchase, every day and pay no annual fee. 10X miles on thousands of hotels through January 2020; learn more at hotels.com/venture. $0 annual fee and no foreign transaction fees No foreign transaction fees.

Bank of America Cash Rewards: Online $150 cash rewards bonus after making at least $500 in purchases in the first 90 days of your account opening. 3% cash back in the category of your choice: gas, online shopping, dining, travel, drug stores, or home improvement/furnishings. 2% cash back at grocery stores and wholesale clubs. 1% cash back on all other purchases . No annual fee.

Chase Freedom: 0% rate for 15 months on purchases and balance transfers. $150 cash bonus after spending $500 in first 3 months. 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter. Unlimited 1% cash back on all other purchases. No annual fee.

Capital One® VentureOne® Rewards Credit Card

INTRO APR on Purchases
0% intro on purchases for 12 months
INTRO apr on Balance Transfer
N/A
Regular APR
13.74% - 23.74% (Variable)
Annual Fee
$0
Rewards Program
Venture® Rewards
ABOUT THIS CREDIT CARD:
  • $0 annual fee and no foreign transaction fees
  • Earn a bonus of 20,000 miles once you spend $1,000 on purchases within 3 months from account opening, equal to $200 in travel
  • Earn 1.25X miles on every purchase, every day
  • Earn 10X miles on thousands of hotels, through January 2020; learn more at hotels.com/venture
  • Transfer your miles to over 12 leading travel loyalty programs
  • Enjoy 0% intro APR on purchases for 12 months; 13.74% - 23.74% variable APR after that
  • Travel when you want with no blackout dates and fly any airline, stay at any hotel, anytime
  • Miles won't expire for the life of the account and there's no limit to how many you can earn
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Bank of America® Cash Rewards Credit Card

INTRO APR on Purchases
0% Introductory APR on purchases for 12 billing cycles
INTRO apr on Balance Transfer
0% Intro APR for 12 billing cycles for balance transfers made in the first 60 days
Regular APR
16.24% to 26.24% Variable APR on purchases and balance transfers
Annual Fee
$0
Rewards Program
BankAmericard Cash Rewards™
Bonuses & Rewards
  • + 3% cash back in the category of your choice: gas, online shopping, dining, travel, drug stores, or home improvement/furnishings
  • + 2% cash back at grocery stores and wholesale clubs
  • + 1% cash back on all other purchases
  • Online $150 cash rewards bonus after making at least $500 in purchases in the first 90 days of your account opening
  • You’ll earn 3% and 2% cash back on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then earn 1%
  • There's no annual fee and your cash rewards don't expire. Each month, as you plan for future purchases, you can change your 3% choice category online or through our mobile app.
  • If you're a Preferred Rewards client, you can increase that bonus to 25% - 75%
  • 3% of each transaction in U.S. dollars
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Chase Freedom®

INTRO APR on Purchases
0% Intro APR on Purchases for 15 months
INTRO apr on Balance Transfer
0% Intro APR on Balance Transfers for 15 months
Regular APR
17.24% to 25.99% Variable
Annual Fee
$0
Rewards Program
Ultimate Rewards®
Bonuses & Rewards
  • + Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate
  • + Enjoy new 5% categories each quarter
  • + Unlimited 1% cash back on all other purchases - it's automatic
  • + Cash Back rewards do not expire as long as your account is open and there is no minimum to redeem for cash back.
  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 17.24% to 25.99%. Balance transfer fee is 3% of the amount transferred, $5 minimum
  • Free credit score, updated weekly with Credit Journey℠
  • No annual fee
  • 3% foreign transaction fee
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If You Want A Metal Credit Card

Capital One Venture Rewards: 50,000 bonus miles after spending $3,000 in first 3 months. 2x miles on every purchase. Annual fee: $0 intro for first year; $95 after that thereafter.

Capital One Savor Cash Rewards: $300 cash back bonus after spending $3,000 in the first 3 months. Unlimited 4% cash back on dining and entertainment expenses; 2% cash back at grocery stores; 1% back on all other purchases. In addition, because of a new partnership with Vivid Seats, get 8% cash back on tickets for live shows, concerts, sporting events, and other similar events through May 2020. Annual fee: $0 intro for first year; $95 after that thereafter.

Capital One® Venture® Rewards Credit Card

INTRO APR on Purchases
N/A
INTRO apr on Balance Transfer
N/A
Regular APR
17.49% - 24.74% (Variable)
Annual Fee
$0 intro for first year; $95 after that
Rewards Program
Venture® Rewards
ABOUT THIS CREDIT CARD:
  • Enjoy a one-time bonus of 50,000 miles once you spend $3,000 on purchases within 3 months from account opening, equal to $500 in travel
  • Earn 2X miles on every purchase, every day. Plus earn 10X miles on thousands of hotels through January 2020; learn more at hotels.com/venture
  • Named ‘The Best Travel Card' by CNBC, 2018
  • Receive up to $100 application fee credit for Global Entry or TSA Pre✓®
  • Fly any airline, stay at any hotel, anytime; no blackout dates. Plus transfer your miles to over 12 leading travel loyalty programs
  • Miles won't expire for the life of the account and there's no limit to how many you can earn
  • No foreign transaction fees
  • $0 intro annual fee for the first year; $95 after that
Show More Details
Hide Details

Capital One® Savor® Cash Rewards Credit Card

INTRO APR on Purchases
N/A
INTRO apr on Balance Transfer
N/A
Regular APR
16.24% - 25.24% (Variable)
Annual Fee
$0 intro for first year, $95 after that
Rewards Program
Capital One® Cash Back Rewards
ABOUT THIS CREDIT CARD:
  • Earn a one-time $300 cash bonus after you spend $3000 on purchases within the first 3 months from account opening
  • Earn unlimited 4% cash back on dining and entertainment, 2% at grocery stores and 1% on all other purchases. Plus, earn 8% cash back on tickets at Vivid Seats through May 2020.
  • No rotating categories or sign-ups needed to earn cash rewards; plus cash back won’t expire for the life of the account and there’s no limit to how much you can earn
  • No foreign transaction fees
  • Capital One cardholders get access to premium experiences in dining, entertainment and more
  • $0 intro annual fee for the first year, $95 after that
Show More Details
Hide Details

The Wrap Up

Apple certainly changed the game when it first unleashed the original iPhone.  Since then, the company has been looking to bottle lightning for a second time. Alas, the Apple credit card is that lightning strike.

Apple might play up the idea of no fees, but the operational reality is that you have to own an iPhone to have an Apple card, and you will undoubtedly need to upgrade your phone on time. Given the cost of an iPhone now, the cost of that purchase is a substantial hidden fee consumers will pay to get or keep their Apple credit card.

So think carefully before rushing to apply for your own Apple card. And ask yourself if it’s really worth the fee you will pay … or are you better off choosing a card that truly offers no hidden fees and comes with great bonuses, like an abundance of airline miles or bonus cash back for signing up.

But we want to know: What do you think of Apple’s new credit card – will you get one, despite having to upgrade your phone at some point to keep your card?

Let us know in the comment section below.

Editorial Disclosure: Opinions expressed here are author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.

UGC Disclosure: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved, or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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