Applying for the new Apple Card? Here's what you need to know

Apple announced on March 25, 2019, that it plans to roll out a new cash-back credit card this summer.
Source: Apple

The much-anticipated Apple Card is now available to users everywhere. Apple, which launched the card in partnership with Goldman Sachs and invited a small number of people to apply in early August, has now made the card broadly accessible via the iPhone's Wallet app.

Here's what you need to know before applying for an Apple Card.

The application process is quick

The Apple Card application is done completely on your phone. After you plug in your basic information, including your annual income, you'll be prompted to scan a government-issued ID and specify whether or not you want a physical credit card, which, depending on your shopping habits, may be useful. Not all businesses are equipped to accept Apple Pay via your iPhone, which uses touch technology.

The application process takes minutes. If you're approved, the digital card will appear in your Apple Wallet and you can begin using it instantly. The card has no sign-up bonus or annual fee. Interest rates vary from 12.99% to 23.99%, depending on the applicant's creditworthiness.

The Apple Card approves the vast majority of applicants, even those with credit scores on the lower end of the spectrum, says Ted Rossman, a credit industry analyst for CreditCards.com.

If your FICO score is 600 and above, you're likely to get approved for an Apple Card, according to Apple. That's 140 points lower than 740, which is the score that experts say can give you a "slam dunk" chance of qualifying for other cash-back rewards cards.

"Apple Card is targeting a wide flock of the population, which is pretty unusual among rewards cards," he says. "It's actually an interesting starter card for people. If you have no credit or bad credit, this card starts to look more attractive."

It's actually an interesting starter card for people. If you have no credit or bad credit, this card starts to look more attractive.
Ted Rossman
Bankrate Analyst

You can get 3% cash back on some purchases

With the Apple Card's "Daily Cash" program, users earn 3% cash back on purchases of all Apple products, including at Apple retail stores, in the App store and at Apple.com. The card offers 2% cash back on Apple Pay purchases and 1% cash back on all other purchases.

On August 20, the company announced a 3% cash-back incentive for Uber and Uber Eats purchases, and it teased that more merchants would offer cash-back incentives at the 3% rate in the future.

"I think they're trying to play the long game by appealing to a lot of people, boosting iPhone and Apple Pay usage, and Daily Cash plays into that because it can be used to transfer cash to family and friends, in the same way you would use Venmo," says Rossman. "The more they can get people transacting on their platform, the better for them."

As with any credit card, though, be mindful of best practices and be responsible. That means trying to make all payments on time, for example, and keeping your credit utilization rate, or how much credit you use compared to how much you could use, low — ideally below 30%.

As long as you're paying off your balance in full every month, using a card to make even small purchases can add up to help you qualify for rewards, Nick Ewen, senior editor at The Points Guy, recently told Grow.

3 steps to build your credit score with Matt Schulz

The main security feature is 'pretty novel'

The physical Apple credit card works when paired with your iPhone, diminishing the likelihood that your card can be used by a different iPhone user if lost or stolen. "I actually think this is pretty novel from a security standpoint, and I think others [card issuers] will probably copy it, because chip cards are really good at preventing in-person fraud but they don't do anything online," says Rossman.

By securing online purchases, which require a thumbprint or face authentication, Apple is "moving the security game forward," he adds.

The card offers some unusual features

Certain Apple Card features stand out, such as:

The digital pay design. The Apple Card lives in your iPhone Wallet, meaning you don't need the physical card to make in-person purchases as long as you have your phone. Cardholders can also receive a unique physical card that only contains the cardholder's name and a titanium chip, no credit card number or security code.

The daily cash back. Once a purchase is posted to your account, you'll receive your cash-back rewards, which you can redeem daily. This is significantly faster than some rewards cards that require you wait a full billing cycle to redeem awards, but it's not unique: Other card issuers, like Capital One, already offer daily cash-back benefits.

The financial wellness tools. The card offers a "payment nudge" that shows how much interest you might get charged on certain purchases, and it also helps you track your spending in real time using color-coded spending categories.

How the pain of paying can affect your spending

The card's downsides

You need an iPhone to take advantage of the digital rewards associated with the Apple Card. Like most cash-back cards, the Apple Card offers an unlimited 1% cash back on everyday purchases. But there are other rewards cards that could be potentially much more valuable, depending on your spending habits. Some of Bankrate's top-rated rewards cards have bonus spending categories of up to 6% cash back.

The push to use Apple Pay is also a push towards making spending easy and frictionless — which can lead you to overspend, researchers have found. When you pay with cash, they say, you're more likely to feel the "pain of paying," which sounds bad but can actually help you make more conscious choices about your purchases.

Still, Rossman suggests that if you're looking for a starter card from a powerful brand, with no fees and an added security measure, the Apple Card might be worth looking into.

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