Apple tries to take a bite out of credit card industry

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Apple tries to take a bite out of credit card industry.

It looks different from a traditional credit card — there's no number on the front and the users' name is etched in metal. The card expands the company's digital Apple Pay services, marrying the physical card to a virtual one and integrating both with the iPhone. And it comes with a bevy of perks — quick sign-up, elimination of most fees, strong security protections and cash back.

Apple points out that it is the only card to provide those rewards in real time, so that cash earned can be used immediately. Other companies often make users wait a statement cycle or until the bill has been paid. But WalletHub CEO Odysseas Papadimitriou is dubious people who can afford an iPhone and qualify for the card will need that cash so quickly. He also reiterated that there are better rewards out there, particularly for people with strong credit.

The physical card has no numbers so purchases are made with the embedded chip and the digital version lives in your Apple Wallet on your phone, where it's protected by Face ID or Touch ID. That means that even if someone steals your phone they won't be able to use the card to buy things. However, consumers already have zero fraud liability with credit cards, said Papadimitriou. Federal law limits a consumer's fraud liability to $50 but all the major credit card networks — Visa, Discover, American Express and Mastercard — provide zero liability for consumer cards. Apple is working with Mastercard to create the Apple Card. So, he said, the added protection may be more perception than reality for most.

 

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