COSTA MESA, Calif.–Apple’s new credit card may be a late entrant into the payments market but a new survey finds awareness is relatively high and consumers relatively receptive to making the switch.
As CUToday.info reported here, Apple, in conjunction with Goldman Sachs, has now begun to roll out of the card.
“The Apple Card has not even launched yet, and 38% of U.S. adults are already aware of it, J.D. Power & Associates is reporting. Among those who are aware of the card, J.D. Power found 35% say that they are somewhat or very likely to apply for the card. Those numbers are even higher among younger credit card customers. Among 18-29 year-olds, over half (52%) are aware of the Apple Card, according to the survey.
Strong Awareness
“This is a strong level of awareness, especially for a product that is not yet available to the public and has not been heavily marketed,” J.D. Power reported.
In releasing its findings J.D. Power noted credit card providers have been engaged in a pitched battle to win over new customers with increasingly rich rewards packages over the past several years. While overall attrition rates have remained low, rewards have been the one reliable catalyst to drive switching activity, with 45% of customers who switched cards in the last year saying they did so for better rewards, J.D. Power said.
“Apple appears to be bucking that trend, offering a competitive package of rewards and benefits, but not the best in the industry by any means,” J.D. Power reported. “The Apple Card won’t have any fees, but it also will not offer any type of sign-up bonus. It will pay 2% cash back when a cardholder buys something using Apple Pay. However, the reward rate drops to 1% when the physical titanium card is used.”
Other Findings
J.D. Power said it found 52% of Apple Pay users say they are likely to apply for the Apple Card in the next 12 months. To-date, roughly 11% of adults report using Apple Pay for purchases in-store, and that number rises to 20% among people who use an Apple iPhone, J.D. Power said.
“The challenge for Apple will be to change the credit card purchase habits of consumers to use Apple Pay rather than a physical card,” said J.D. Power.
J.D. Power said it further found 49% of iPhone users say they trust Apple to protect their personal data and privacy, while 59% trust their current bank or credit union. Apple Pay users already have a high level of trust in Apple, with 67% reporting that they trust Apple to protect their personal data and privacy, J.D. Power said.