A look into the future of Credit Cards - The Apple Card - America - CBC Article | Credit card reward programs | Discussion forum

Wonder if you can use it with google Pay?

Americans get better shopping deals than we do in almost every way, including credit card deals. I wouldn't expect the same offer to Canadians, whenever it might get here.

This seems like another step on the road to the social credit system as used in China. And of course Android users will soon have an app for that. But the CBC article itself is funny and reads like an ad. The atricle is almost a word for word recital from someone at Smith School of business. I copied and pasted his quotes only(the bulk of the story) for context :
"It's amazing and everyone with an Apple iPhone is absolutely going to get it," says John-Kurt Pliniussen of the Smith School of Business at Queen's University in Kingston, Ont.

It's a savvy move to use a smartphone to go deeper into making purchases, Pliniussen told CBC News.

"You're going to get some education. You're going to reduce the costs of all your credit shopping. You're going to have artificial intelligence coach you and help you learn about financing and you're going to get recommendations as to how to budget," he said.

"You're also going to get cash rewards and receipts. It's just delightful. And it's … going to shock all the traditional credit card holders."

He says credit card companies will be scrambling now to match what Apple is offering as paying by smartphone will become the norm. Other credit card companies will be designing an Android app to do what the Apple card does and more, Alexander said.( is this a typo ? , WHO IS Alexander ?)

"One of the most brilliant parts of this announcement is they're branding with Goldman Sachs and also MasterCard which is handling the payment processes on the back end," he said, pointing out that Goldman Sachs already is well-known globally.

Pliniussen sees this as a potential way to introduce teens to credit cards, in part because of Apple's great appeal to the youth market.

"If I have a young child who can't have their own credit card yet then what I would do is if I had an Apple phone I would sign up and show my children you know the process of using it and get them ready for it for the time when they go off to university and need their own credit cards or access to credit. I'd say it's a great learning tool."

I think he's got an I(m)plant

I hope for the student's sake he is only the janitor

Oscar said
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I think he's got an I(m)plant

I hope for the student's sake he is only the janitor

He's regurgitating the marketing hype from Apple's marketing department. Not surprising considering he is a digital marketing professor.

As for the substance of the card, nothing is shaking in the credit card world. Apple Card is just a rebranded Goldman Sachs MasterCard. Kind of like trying to shake up the taxi market in Toronto by creating a transportation app that hails cabs from Beck Taxi, Royal Taxi, or City Taxi.

Top It Up looked into the details and found that the 2% cashback only applies to Apple Pay payments that are done through contactless payment. If one can't tap and needs to use the physical card, then it's 1% cashback. That's just another variation of 1%-2%-3% cashback formula diddling: 2% on contactless Apple Pay, 1% on all the rest.

Since one can't tap on over $100 purchases, big ticket spenders would likely find the Rogers World Elite MasterCard, with 1.75% cashback on non-foreign-currency charges, is better.

The app will likely be a dud for budgeting. Challenge with software based on debit or credit card charge data is the software is quite blind from the missing information. Retailers do not ordinarily transmit the items purchased with the credit card charge.

A person or software can see my $52.28 charge at Walmart. But what part of that $52.28, if any, was for groceries, clothing, laundry detergent, or replacement air filters for the car? Without accurately allocating such mixed charges, any spending totals shown by the software for groceries, household expenses, and car costs, for example, are useless. Software industry has a saying: Garbage in, garbage out.

Nehpets said

The only real advantage, from my own experience, of U.S. cash back credit cards is there is no minimum redemption amount for the cash back (Chase and Discover) compared to Canadian cards that require a minimum of $20 (Rogers), $50 (BMO) (MBNA) (Meridian Visa) to redeem cash back.

Stephen

I found one case where the cashback formula was designed with a sense of humour: The Citi® Double Cash MasterCard.

2% cashback, only if one doesn't default:

• 1% on purchases plus
• 1% on the payments towards the purchases!

User230 said

That is true. It is not a good card for high price purchases.

I am also wondering if online purchases are also 1% or not.

If the online merchant supports Apple Pay as a payment method, then 2% cashback would apply.

If not and the Apple Card's traditional physical MasterCard card number, expiry date, and CVV are used, then the cashback will be 1%.

However, online merchants don't have much of an incentive to add Apple Pay support. After all, Apple Pay is just a wallet and not a credit card. Potential Apple Pay customers will have a regular MasterCard, Visa, AMEX, or Discover card that they can use to pay.

Personally, I think it will shake up the market regardless (if what they say on paper is true).

I am very against fees. They seem to take a very aggressive stance at attempting to eliminate fees all together. It might not eliminate them all but they have a good start and if they are successful they could change how other cc companies do business.

Right now, most credit card companies have a large amount of fees (fx and all kinds from everywhere), high interest rate (around 20% yearly), low rewards (majority of cards are 0.5% to 1% rewards level) and with bad customer service.
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Except for the bad customer service, there are financial reasons for those.

There isn't much margin for Canadian credit cards nowadays. Competition has eliminate lots of the revenue. Can't really charge any annual fees unless there is some generous reward program which costs money. Most of the interchange is given back through the costs of those reward programs.

In some cases, cardholders are getting more back in rewards than the interchange they bring in! Tangerine Bank is losing 0.7% a month on cardholders like me who only use their MasterCard for the 2% categories and don't carry a balance.