The Galaxy Card Is Samsung’s Answer to the Apple Card

Nearly seven years after Apple debuted the Apple Card, Samsung is following the iPhone maker's footsteps with the Galaxy Card, aiming for its own slice of the credit card market. The announcement comes two days before Samsung's second Galaxy Unpacked event of the year, where it's expected to showcase new smartwatches and folding smartphones.

The Galaxy Card is issued by Barclays on the Visa network; the Apple Card, originally issued by Goldman Sachs but now transitioning to Chase, is on the MasterCard network. There is a physical card—it's not made of titanium but recycled steel. The virtual card will be provisioned to a user's Samsung Wallet account.

With no annual fee, Samsung says cardmembers can earn 5 percent cash rewards on all in-store or online purchases made directly from Samsung in the US, 3 percent cash rewards on purchases made with the Galaxy Card using Samsung Wallet, 2 percent cash rewards on streaming service subscriptions, and 1 percent cash rewards on everything else with the physical card. The cash rewards can be redeemed as a statement credit or transferred to a checking or savings account.

The annual percentage rate (APR) varies by cardmember, but the card has no foreign transaction fees. Other perks include a 20 percent discount on Samsung's VIP Advantage membership, which offers extended device protection, specialized support, and exclusive deals, and $200 in cash rewards after spending $2,000 in the first 90 days. Applications open up on July 22.

The Samsung Wallet app is only available on Samsung smartphones and watches, so what happens if a consumer switches to a different smartphone brand? The company says Galaxy Card is not limited to Samsung device owners and that anyone can use the physical card, but you lose the key perks; the card can be managed through a BarclaysUS.com online portal. (Similarly, if an iPhone owner switches to Android, their physical Apple Card will still work, but they lose access to the Apple Wallet app and the 3 percent daily cash perk on Apple purchases; there's a web portal to manage the account.)

The rewards aren't revolutionary, but they're targeting Samsung's most loyal consumers and card-maxxers looking to rack up the most points with every dollar they spend. Brian Riley, director of Credit Advisory Services at Javelin Strategy & Research, a financial research and consulting group, says entering the space is important for Samsung to increase brand presence and loyalty.

“Cards are basically a commodity at the end of the day; how you differentiate them is really what makes the difference," Riley says. “That's really the big deal here—how you use your card." Riley has a card for grocery shopping and one for Amazon transactions; all of these steps help him earn the most points.

“One of the big challenges here on rewards is that quite often, you go in well-intentioned and you don't get the full benefit of the rewards because you start revolving on the product,” Riley says, meaning cardmembers start accumulating interest on the unpaid balance, with interest charges wiping out the value earned by the rewards.

Riley points to one of the failings of the Apple Card: Apple oversold it. It's slick, yes, but it never became a mainstream challenger to the credit card industry because the average consumer typically has three or four cards per household: one for all of their purchases, one for emergencies, and one that might focus on travel.

Sara Rathner, a credit card expert at NerdWallet, echoed that sentiment. “The Apple Card is far from the iPhone in terms of changing the world,” Rathner says. “It's fine; it's a cash-back card.” All of these cards exist to create brand loyalty, she says. If you have a lot of points with Hyatt, you're more likely to book a stay at a Hyatt property on your next trip. If you make many purchases with Samsung Wallet, that might incentivize you to get the Galaxy Card.

Rathner says the 3 percent cash reward for purchases using the Samsung Wallet app is a really good rate. If you tap-to-pay at New York City's subway turnstile with Samsung Wallet on your phone, for example, that's 3 percent on every commute, and “that would be compelling.”

While Rathner finds the Apple Card underwhelming, she does credit Apple with innovating on certain features. For example, Apple allows you to see the interest rate and credit rate you would qualify for before a credit pull, something other credit cards are increasingly offering. The app (and card) have a beautiful design, the physical card is easy to activate with just a tap on the iPhone, and cash rewards are posted daily rather than waiting for a billing cycle.

“I think if other cards want to compete in that way and also follow suit with those features, I think that just makes credit cards in general better products for consumers," Rathner says. “We'll see how this resonates with people who have Samsung phones.”