The specific callout of restricting "cryptocurrency purchases" in the title is click-bait.
Actual context from the article:
>And according to Reuters, it will also come with a ban on purchasing cash advances and cash equivalents, with the latter including cryptocurrencies, casino chips, and lottery tickets.
>>It would seem neither Apple nor Goldman Sachs has anything in particular against cryptocurrencies, but Bitcoin and other digital tokens would seem to fall under the cash equivalents umbrella.
No, this is a fairly standard clause in credit card contracts to limit risk. Crypto currency values are extremely volatile. Not everyone can handle gambling (have you ever watched a card counting video on YouTube? Mostly bellyaching because some other player got “their” card). Cash advances are always loan shark rates (though I’m not clear how cash is considered high risk and a consumed meal is not). You’ll find similar clauses in many card agreements these days. Everyone is hungry for Apple Card details or this wouldn’t be news.
There is a separate clause where Apple reserves the right to close the account of anyone reselling or gaming the system (doing something Apple didn’t think of).
The cash advance penalty is to protect the system cut. When you pay $50 for a meal the credit card system takes a 2-6% (some countries/regions limit this to sane amounts like 0.5-1%, eg EU countries and Australia) cut depending on the card, split between the network (visa, MasterCard etc) and the source and settling banks.
If you take a cash advance for $50 you only see $50 on your statement and the network doesn’t get its cut. If there’s no penalty for using a cash advance you’d find many businesses would have an in-house ATM so you could pay in cash and they could avoid the cost of accepting cards.
You actually see this in places like New Zealand where we have unregulated credit/debit card interchange rates but also have an established fee-free(ish) card system. Almost all smaller retailers accept EFTPOS card transactions but not credit/debit cards.
What is a way to get money from a card into a bank account?
Or conversely, is there a way to have a virtual "bank account" that is accepted by credit cards as a source of payment (e.g. via Plaid or whatever) but is actually backed by a credit card?
I am asking because being able to use credit cards to pay off credit cards, without taking cash advances, can provide a lot more options for a person or company.
Obviously you can have two companies controlled by the same entity that each purchase a product from one another, paying only the merchant fee. But does that violate the credit card issuer's policy, or do they really care?
Disclaimer: if you're in a situation where you're paying credit cards with other credit cards, you're actively courting financial ruin.
That said: in the US, credit cardholders are inundated with balance transfer offers. Frequently, this involves the credit card company mailing checks to their customers. These checks work just like they are attached to a checking account, but they are backed by the underlying credit card. I am aware of a few companies that juggled credit card offers in this way to get off the ground.
I would disagree. Ive made it through college by just transferring balances to 0% interest cards and get a new one every 15 months or so. I pay 2% balance transfer fees or so everytime. Which is a better rate than the big Banks get from the fed.
In the UK this is known as Stoozing. Some credit cards will give you a 0% interest rate (APR) if you do a balance transfer. That's usually to pay off another credit card.
Some allow for "Super Balance Transfers". They let you do a balance transfer into a current account. Ostensibly to pay off your overdraft - but they've no way of knowing.
Et voilà! Cash from your credit card.
The downsides? There's usually a balance transfer fee of a couple of percent and if you don't keep up with repayments, the APR can revert from 0% to 20%+.
Not that I know of. You can certainly take advantage of balance transfer offers that some card providers have to bounce the credit around, but most only do that for new accounts.
I think part of the concern or risk around cash is that the CC company cannot 'undo' the transaction or get their money back the way they can in other transactions.
Good to know. Unfortunately I've had to use a CC or two via TransferWise to help me out during cashflow issues especially when a large expected tax return was delayed.
JP Morgan Chase currently lost their motion to dismiss a lawsuit against their policy of treating cryptocurrency purchases as cash advances
But their terms of service didn't spell out cryptocurrencies, lets see how it plays out
I’m betting cryptocurrency purchases will begin accurately falling under a consumer goods framework sooner rather than later, indistinct from buying a cryptographic accesstoken for any saas product which powers your user session.
> JP Morgan Chase currently lost their motion to dismiss a lawsuit against their policy of treating cryptocurrency purchases as cash advances
Just a note for people reading this who might not understand the nuances of the American tort system: this merely means that JPM's lawyers tried to "short circuit" the process by asking a judge to decide the case has no merit, and throw it out before going through the whole process. The judge disagreed, thinks there might be merit to the case, and wants to see it go to trial (or, more likely, see JPM settle with the plaintiff).
(1) a system of money in general use in a particular country.
(2) the fact or quality of being generally accepted or in use.
Cryptocurrencies satisfy neither definition and are therefore not currencies. They may be cash equivalents for the purpose of this definition, however. More like a gift card whose value fluctuates wildly and is primarily used for narcotics, money laundering and at best, speculation.
When you are being encouraged to purchase Bitcoin (for example), it's the currency of the future. When you are trying to use a credit card to purchase Bitcoin (for example), it's not a currency. When you are facing a tax bill, I can't remember whether the claim is that it's a currency or a security.
They are hashes secured by repeatable cryptography which are stored on a distributed database
The monikers are skeumorphs to be more relatable to a nearest prior elementary concept
Some of those hashes are used for payment, some of those hashes are used for a record of fractional ownership of an enterprise, some of those hashes are used to access a good or service. A credit card company would therefore be misapplying their policy, when there isnt enough information in their transaction detail and also no rationale for charging higher fees for this type of transaction. If any actual risk was higher they should make a third category. Otherwise treat a crypto transaction like any purchase of consumer goods.
This is the sort of "laws work like computer code" thinking that gets you "I don't recognize this court because it has a fringed flag" sovereign citizen types.
Several countries and states have laws reflective of what I described, with the same taxonomy already in committee in Congress
US payment processors are the ones flying blind and interpreting things arbitrarily, and the courts might too, but the direction the legislatures are going will correct that
US payment processors have been giving casino chips this treatment for decades. I see no reason US legislatures would give cryptocurrency better treatment than that - if anything, they're more likely to smack it around.
Again, this is that "laws work like computer code" thinking.
Euros vary in USD value, and take a process to convert to/from USD just like Bitcoin does. Governments are not going to ban banks from treating BTC transactions as cash advances.
> Again, this is that "laws work like computer code" thinking
No, it's not.
Having done a political science degree with significant coursework in law and judicial politics, and gone back later and done a couple years of law school while working as a programmer before deciding that the cost/benefit of a license to practice law wasn't really worth it, I'm somewhat familiar with the differences between law and computer code.
> Euros vary in USD value, and take a process to convert to/from USD just like Bitcoin does.
That's, ironically, the “law works like computer code” thinking you were just complaining about. While there are certainly laws focussed on USD and equivalents vs every other asset imaginable, there are lots of laws about money more generally, and a lot of established precedent about what is and is not money, and, perhaps more critically, about how terms which are ambiguous in contracts (perhaps because subject matter to which they are being applied wasn't well known when they were drafted) are applied between parties with unequal power over drafting of th contract.
> Governments are not going to ban banks from treating BTC transactions as cash advances.
Governments aren't going tonban banks from applying the same didadvantageous conditions applied to cash advances to any transactions they want, but those with decent consumer protection laws may also not let them do so arbitrarily after the fact without clear notice in contracts of the kinds of transactions to which those terms will be applied, just because of some loose analogy between the subject of a term in a contract and product class to which it would not generally have been understood to apply by most people agreeing to the contract.
> Governments are not going to ban banks from treating BTC transactions as cash advances
Courts typically will look at the bank's rationale for charging customers higher fees arbitrarily.
You are heavily focused on the semantical debate about "cash advance" and not the consequences of categorizing this way.
A court might say "sure call them that, just don't charge customers higher a cash advance fee and higher interest", the bank will consider that irreconcilable and change the categorization anyway. Nobody will address the specific difference you wanted to debate about.
I'm still mystified by what supposed competitive edge the Apple Card is supposed to have. Its rewards program is pretty mediocre, and virtually every Visa/MC/Amex supports Apple Pay seamlessly as is.
I'm pretty bought into the Apple ecosystem and do almost all my spending via credit card. I feel like I am supposed to be the target market, so what is the selling point?
Compared to my MajorBank card, I expect that Apple Card will have somewhat worse rewards. But the process - signup, spending tracking and notifications, accessing rewards, freezing, cancellation - will be leagues better, and privacy will be better too. That will be their edge.
The MajorBank mobile app is weird and janky feeling, with lots of ads and other nonsense in it. It pushes me to open investment accounts and take out a mortgage. It tells me I can get 10% back at KidsPizzaRestaurant. It promotes "offers we've selected just for you based on your relationship with MajorBank," through virtue of monitoring my spending history.
I expect none of that from Apple. In my mind the risks are 1. Goldman Sachs and 2. Apple's financialization / being incentivized to push people into debt.
Apple Card is just a co-branded credit card no different than a Chase United MileagePlus card. Apple, like United, is the co-brand partner -- the face -- Goldman, like Chase, does literally everything else. Apple Card has a few neat features but not much more than anything else you've added to your Apple Wallet.
Credit cards are a high CAC business in the premium space -- hundreds to a thousand dollars for an Amex Platinum class card. All Apple does different here is lower CAC by leveraging their immense brand power and their retail network and a few neat frilly UI features. Those aren't worth the opportunity cost of a 2% flat cash back card with no annual fee like the Citi Double Cash, or 2.67% with Bank of America if you have 100K in total balances including investments.
Those are the numbers to beat, and also why it's so hard to truly innovate in this space.
It's really not at all competitive. A shocking number of places still use a crappy magstripe reader or have a nice new Vodafone terminal but disable NFC (and possibly chip as well). Apple Card only gives you 2% if you can use NFC, Citi gives you 2% even at hotels and airlines that require a card # online, and parks and old gas stations that still just have a magstripe reader. (I've never been to a hotel that took chip or NFC for last-minute bookings, it's always a crappy old magstripe reader built into the keyboard.)
And how do you plan to get the entire Internet where you probably do most of your shopping to switch to Apple Pay? :) Amazon's in no hurry, and that's who gets a disproportionate amount of my spend.
Amazon offers (and I have) a store card that gives 5% cash back. I'd be insane to use Apple Pay there.
Anywhere that uses Stripe can accept Apple Pay, and the same approach from meatspace works in getting people to turn it on - get people to complain because they're missing out on their cash-back.
The competitive options are 2%+ with no annual fee and no requirement to use Apple Pay (but you still retain that option). On this axis it’s strictly better.
- mobile app improvements with effortless freeze/cancellation/card reorder
- great integrations in iOS/macOS
- even the metal credit card that is very similar to how the physical apple card has been described
For now the rewards program I'm works well for me and exceeds what Apple has announced; but Apple's is the next best option. One good thing with Apple Card is that by being in the MasterCard network, it can be good for those places that don't take Amex.
I’m still waiting for anyone to realise that Cambridge Analytica main data source was augmented credit card data (Acxiom mainly), and the subsequent scandal.
Apple has the clout and the PR team to make that happen. They are still going after Facebook but I suspect they’ll go after credit cards soon enough.
> Its rewards program is pretty mediocre, and virtually every Visa/MC/Amex supports Apple Pay seamlessly as is.
Three use cases: card swipes, tap to pay, and Apple purchases.
For card swipe, 1 percent is meh. For tap to pay, 2 percent cashback is about as good as it gets without messing with annual fees. The daily cash back is a mild improvement over other, comparable plans like '1 percent when you're billed, 1 percent when you pay that bill.' For Apple specific purchases, this replaces the Barclay's branded card, and the cash back plan is largely an improvement over the '$25 Apple giftcard' seen previously.
Beyond that, the card is advertised as 'no fees.' Not even for cash advances, late or missed payments. So how do they solve the no-cash-advance fee problem? Can't have cash advance fees if you don't offer cash advances. Hence the rules outlined in the article about cash equivalents.
> 2 percent cashback is about as good as it gets without messing with annual fees.
Citi Double Cash is 2% flat cash back with no annual fee, and BoA has a 2.67% cash back card if you have 100K in assets with them. Cash advances and late or missed payments fees are rare if you keep on top of things, but the spread on cash back hits your wallet every time you use it.
> Citi Double Cash is 2% flat cash back with no annual fee
Citi Double Cash is 1 percent when you swipe, and 1 percent when you pay it off. It's 2 percent, but the delay is like 1-2 months on the second half. As for BoA's assets under management deal, I largely view that as a hidden annual fee. They'll get their pound of flesh somehow.
If these cards are all largely comparable, is it worth switching? For rewards optimizers and churners, likely not. But it's also definitely not worth switching to Double Cash if already have the Apple card and tap to pay regularly, and that's likely what AAPL/GS are banking on. Walk into an Apple store, buy a thousand dollar iPhone on credit, and the sales Genius helps you set up tap to pay with that new card right there.
And daily credit is a double edged sword. 30 bucks a month or whatever you might just apply to the balance, but with a daily trickle it's likely some folks will just dump it into iTunes / the App Store. It's certainly a way to reduce the friction of spending on Apple services. Plus, someone is free to profit from the float of all that cash back money sitting idle. Could be Goldman, could be Apple, could be Green Dot Bank.
> But it's also definitely not worth switching to Double Cash if already have the Apple card and tap to pay regularly, and that's likely what AAPL/GS are banking on. Walk into an Apple store, buy a thousand dollar iPhone on credit, and the sales Genius helps you set up tap to pay with that new card right there.
The argument being made isn't switch from the Apple Card, it's switch to and strictly speaking 2% all the time is better than 2% some of the time, all else being equal, and it pretty much is. Sure, you buy at the Apple Store and you get 2%, though I think less than half the places I regularly shop at, including 100% of the places I buy things online (like Amazon) offer contactless payments.
People find delayed reward motivating, and having the credit trickle in over time instead of daily is actually going to get you to engage with the card more as you redeem the rewards for things of higher perceived value. While what you're saying sounds right on face, human psychology says otherwise :)
The 2.67% back is 40% more cash back, so yeah, transfer 100K worth of assets to a BAML account that you're holding for the long term (and I believe IRAs count), and enjoy. It's a better product.
Well, 3 percent, which is kind of the point here -- you get the Apple card for use with Apple purchases.
> The 2.67% back is 40% more cash back, so yeah, transfer 100K worth of assets to a BAML account that you're holding for the long term (and I believe IRAs count), and enjoy. It's a better product.
Will add it to my list of cards to research, but looking now, it seems like a 75 percent boost to their card offerings, and the 1.5 percent cash back card comes with a 95 dollar annual fee. Is there a different card you were thinking of?
No fees and better UX are the main selling points.
It might shine for foreign transactions: no fee (usually 2%) + 1% cashback seems pretty good. If we're being realistic though, they'll probably have a terrible FX spread.
In the credit card world, "no foreign transaction fees" means, literally, the mid-market rate. If they charge a spread on forex, it's very clearly spelled out in the disclosures as required by law. It's not advertised as a no foreign transaction fee card if they have a forex spread. That's not something they mess around with. No forex fee is pretty much table stakes these days.
Just be careful, if someone in a foreign country offers to bill you in your local currency you literally cannot win. They whack you with a ~10% "convenience" fee and if your issuer charges foreign transaction fees, they'll do that anyways because it's based on point of sale and not based on currency.
> No forex fee is pretty much table stakes these days.
Agreed.
> Just be careful, if someone in a foreign country offers to bill you in your local currency you literally cannot win.
Yep, always take the bill in local currency. ATMs will often try to scare a person into converting, but the rate and fee is almost always much worse than a person's bank.
> ATMs will often try to scare a person into converting, but the rate and fee is almost always much worse than a person's bank.
Not just worse, additive haha. You pay both fees stacked on top. But it's a small price to pay for the peace of mind knowing exactly what your exchange rate is going to be in the moment, if the ATMs are to be believed haha.
It's not even competitive on foreign transactions... There's a whole bunch of cards that give you (at least) 1.5% cash back with no foreign transaction fee or annual fee. Off the top of my head: BoA Travel Rewards, Cap One QuicksilverOne, Navy Federal CashRewards, PayPal MasterCard (2%).
Fidelity Visa gets you 1% cash back on foreign transactions (normal 2%-1% fee)
While forex is set by the network, some cards charge a cross border assessment (CBA) fee on international purchases.
Though admittedly I have 3 cards with no CBA and only that charges a 3.8% CBA... but I did prioritize for cards better for international travel. Most of my friends have cards that do charge a CBA
MC provide a currency conversion rate, yes, but a lot of card issuers also add a foreign transaction fee of some kind on top of that, sometimes both a percentage and a fixed charge.
Generating virtual credit card numbers is kind of a big sell for me. I double any other credit card companies will have anything comparable to Apple's UI/UX of it either.
you can do this with citi and capital one, but yes the UI is terrible. citi requires flash player or an absolutely terrible java desktop app. capital one requires a browser extension
It's my understanding that it will be easier to get an Apple branded credit card than most cards with similar features and rewards.
To get no fees and cash back rewards, a lot of banks make you jump through hoops, have better than average credit, maintain a linked account with a minimum balance, and other things.
Apple also seems to be emphasizing the simplicity of its card, and making it easier to manage than many other cards currently available.
It's not the right card for everyone. But if there was a single "best" card, then there would be only one card, and everyone would have it.
I think I read that if you lose your Apple Credit Card they will issue you a new one automatically in Apple Pay. You'll still get the physical one in the mail later, but if true that's a better UX then what all other cards currently do.
I recently reported a fraudulent transaction on my card. My existing card was invalidated and a new one was on the way. Apple Pay was automatically made aware of this, it said something to the effect of: “Looks like you are getting a replacement card. You can still use this until it arrives.” After it arrived, the number had automatically updated (I didn’t notice exactly when).
In other words, this particular aspect of the UX is already solved.
Depends on the bank. I had to cancel some cards a few months ago and it made them disappear from Apple Pay (with a push notification of course). But I think that might be because I chose the stolen option.
Up, a relatively new digital bank in Australia does this already - I had my card setup in Wallet about 2 minutes after signing up online, a full week before the physical card arrived.
My bank (Bunq) allows me to use offline and online debit cards, for free. Linked to any IBAN (I can have 25 max). The online debit card's CVV code changes every 5 minutes which is convenient enough.
This is a feature of EMV tokenization and not limited to Apple Card. Any card you have in Apple Pay does exactly this, and other issuers have started allowing you to add your card to Apple Pay before you receive the physical one in the mail. As with Apple Card if you report any of these lost or stolen they'll rotate your card's DAN ("Device Account Number").
They aren't "running a [credit] card," Goldman Sachs is the one doing that. The card is merely cobranded so the Apple involvement is limited to it's name/brand and they get a small kickback on card activities. Same if you got a card for a charity, alumni association, or baseball team.
You also have to have an iPhone and apple account. If you don’t have a “required device” they only support interaction through snail mail. They will terminate accounts that fail to maintain a Required Device and Apple account (in good standing).
I wonder if this verbiage is coming from Apple or Goldman Sachs (as I take it, banking apps are generally not too pleased when they run on jailbroken hardware).
I hope the Apple Card is a huge success. There will be a fight to win customers and there will be better rewards from competitors. I will be waiting for those.
The whole reward concept is pretty alien to many of us. It's not something people know or care about in some countries.
I worked to a ecommerce site that entered a new market, after a few weeks a customer called and asked if we couldn't register with MasterCard as an electronic store, so he could get some reward when he shopped at our site. No one had any idea what the customer was talking about, because the reward system isn't really known here.
The rewards may be good for countries like the US, but Apple needs something else for other markeds. More specifically I think they need to be a bank and offer debit cards. Most people in Denmark have debit cards and very few have experience in having to "pay off credit cards". No late fees are irrelevant if all you even known is debit cards.
People keep saying this, but so far the only one I've seen mentioned is BofA when you have $100k on deposit, and even that one I haven't seen linked.
Similar rewards, sure. Citi's Double Cash matches this everywhere except an Apple Store. Better? I'm sure you're right, but I'd like to see links to offers with better rewards. Please.
Apple Card has no fees at all. Not even a late fee. And privacy is far ahead of competitors. Competitors sell your purchase history everywhere. You also get the virtual numbers, you can change your number any time you want and customer support is via iMessage without the nonsense of the "Press 1 for your balance" phone systems common for more credit cards.
It also comes down to trusting Capital One etc. with your data, vs. trusting Apple.
Not having a late fee doesn’t matter. Most people in the game for rewards have good credit. And you can’t have good credit with missed/late repayments.
Doesn’t matter if you get charged a fee on it or not — not having a late repayment likely matters to you more than the fee you’d be charged for having one.
Then again, judging by FICO scores that are okay for the Apple Card, it’s a entry-level card anyway.
Not quite - the issuer is not Apple, but Goldman Sachs. So it’s about trusting Goldman Sachs and Apple and Mastercard with your data, vs trusting Capital One.
If you want a single no frills everyday card then the following provide 2% cash back everywhere with no annual fee:
Fidelity Visa, PayPal MasterCard, Citi DoubleCash.
PayPal MasterCard has no foreign transaction fee and the Fidelity Visa earns 1% overseas due to the 1% foreign transaction fee.
If you want to maximize cash back based on the categories you spend in most, then you have tons of options depending on your biggest spending categories. The only way the Apple card comes out ahead in this area is if most of your spending is at the Apple store/app store.
For an average-ish young person pairing any of the straight 2% cards mentioned above with the Uber Visa card is a great combo - Uber Visa is 4% cash back on dining and 3% cash back on travel, no annual fee, no foreign transaction fee.
It's worth mentioning that petty much all of BoA's offerings are extremely good if you have >$100,000 will Merrill Edge. IRAs count and you get a bunch of free trades.
Thanks! I use Apple Pay most of the time. For some reason almost every place I shop accepts it, but for the places that don't--and aren't Amazon, for which I have their card--I'll try some of these others.
Doctor of Credit has some good advice on best credit card for the categories you spend most on: https://www.doctorofcredit.com/credit-cards/best-credit-card... It can sometimes go a bit out-of-date but its a great overview and (unlike the majority of blogs) they don't have credit card affiliate links[1], so they are unbiased.
The overall experience of using the card, which includes everything from the way the card itself looks and feels to the UX of the iphone app, and customer service. A lot of what differentiates apple are intangibles that aren't captured by raw specs. It's like trying to rate a glass of wine based on it's chemical composition.
But sure, if the overall experience isn't improved over those other cards, the numbers will matter.
When you charge your credit card, on the bank's books these are marked as retail credit. The bank expect this portion of their portfolio to consist of consumer expenses and manages default risks accordingly.
Banks also provide credit for currencies / investments, but those are containerized in another portion of the portfolio with different risk management practices.
Mixing these two portfolios together will make risk management tricky.
The card terms prohibit cash equivalent purchases.
RMB is cash equivalent, so no.
World of Warcraft gold is not^ cash equivalent, so yes.
^You can trade WoW gold for another in-game currency, “Battle.net wallet”, which is pinned to a 1:1 ratio with various currencies but cannot be withdrawn and thus does not qualify as “cash equivalent”.
Technically, I believe that's a loan taken with your credit line as the collateral. It often has a different interest rate and limit than the main line of credit does.
Virtually every banking app on Android tries to detect rooted devices as much as possible and many suspend your online banking access if they find one..
Some bank apps used to work on rooted phones, but thanks to Google SafetyNet (proprietary spyware which reports metrics about your phone to Google so they can determine whether it is "safe" for apps to run) a lot of apps that never did rooted checks have started using it.
It might be possible to use XPosed to trick apps into think that the SafetyNet checks passed, but I bet they've worked hard to make that as hard as humanly possible.
If you use Magisk, which is one of the most common ways to root nowadays, it not only roots, but allows custom software to be installed "systemlessly". This means in most cases, SafetyNet won't be able to detect a rooted phone.
Just like with jailbreaking, smart people will always find a way around these barriers Apple and Google put up
It's funny, it's basically installing a rootkit on your phone (one that you trust), it's a piece of software that has access to everything but tries to hide from detection.
Does that really work? If it was me doing this (NB: I would hate this as a user): I would retrieve the signed token from Google server-side, check whether it's true or false, and remotely lock out the account so it can't be signed in from any phone until you call customer service.
Actual context from the article:
>And according to Reuters, it will also come with a ban on purchasing cash advances and cash equivalents, with the latter including cryptocurrencies, casino chips, and lottery tickets.
>>It would seem neither Apple nor Goldman Sachs has anything in particular against cryptocurrencies, but Bitcoin and other digital tokens would seem to fall under the cash equivalents umbrella.