“Cards are basically products at the end of the day; how you differentiate them is what makes the difference,” Riley says. “That’s the key here – how you use your card.” Riley has a grocery shopping card and one of Amazon’s transactions; All these steps help him get more points.
“One of the biggest challenges here with rewards is that a lot of times, you go in with good intentions and you don’t get the full benefit of the rewards because you start rolling in the product,” Riley says, meaning that card members start collecting interest on unpaid balances, with interest payments wiping out the value earned by the rewards.
Riley points to one of the shortcomings of the Apple Card: Apple oversold it. It’s very clever, yes, but it was never a major challenger to the credit card industry because the average consumer has three or four cards per household: one for all their purchases, one for emergencies, and one that can focus on travel.
Sara Rathner, credit card expert at NerdWallet, echoed that sentiment. “The Apple Card is far from iPhone about changing the world,” Rathner says. “That’s right; it’s a cash back card.” All these cards exist to create brand loyalty, he says. If you have a lot of points with Hyatt, you are more likely to book a stay at a Hyatt property on your next trip. If you make many purchases using Samsung Wallet, it may encourage you to get a Galaxy Card.
Rathner says 3 percent cash back on purchases using the Samsung Wallet app is a pretty good rate. If you tap-to-pay on the New York City subway using Samsung Wallet on your phone, for example, that’s 3 percent per ride, and “that will be mandatory.”
While Rathner finds the Apple Card flawed, he gives Apple credit for some innovative features. For example, Apple lets you see the interest rate and credit limit you’d qualify for before taking out a loan, something that other credit cards are increasingly offering. The app (and card) is well designed, the physical card is easy to activate with just a tap on the iPhone, and cash rewards are posted daily instead of waiting for a billing cycle.
“I think if other cards want to compete in that way and follow suit with those features, I think that makes credit cards in general a better product for consumers,” Rathner says. “We’ll see how this relates to people who have Samsung phones.”
