Everything we know so far about how the Apple Card works

By Shannon Liao

Apple’s newly announced credit card sounds attractive on paper: no late or international fees, up to 3 percent cash back paid daily, and a physical card made of titanium. So are there any catches?

There’s a lot to know about the Apple Card, from how it works, how to get it, and how it compares to other credit cards out there. Here is all of the key information you should know about the Apple Card if you’re considering getting one.

How do you qualify for an Apple Card?

You need an iPhone to apply for an Apple Card, and you may also need some existing credit. Apple declined to share an exact credit score range you’ll need to be within to qualify for its credit card, but from the variable interest rates listed on its site, we do know those with lower credit scores will be subject to higher interest rates, up to 24.24 percent. That’s on par with other credit cards in this category like the Chase Freedom or the Discover Card, which similarly offer cash back with no annual fee, but it doesn’t necessarily shake up the status quo.

The Apple Card is issued by Goldman Sachs, and payments are processed by Mastercard. Apple tells The Verge that Goldman Sachs will be looking at other criteria beyond credit scores, but it did not specify which. Goldman Sachs declined to comment.

When the Apple Card becomes available this summer, you can apply through the Wallet app on your iPhone. Once approved, you’ll get instant access to a digital version of the card that will automatically appear in the app. After a brief waiting period, the physical, chip-enabled card will be shipped to you, which you can then use at retailers that accept Mastercard. At this time, Apple does not plan to allow users to sign up through a web browser.

How do you use the Apple Card?

You can use the Apple Card in three ways. If you choose it as the payment source in Apple Pay, then you can use it wherever you normally use Apple Pay, be it online or through tap-to-pay sales terminals and other contactless points of service.

The physical card works just like a regular chip credit card. However, Mastercard confirmed to The Verge that it won’t support contactless payments, so you can’t just tap the titanium card to a terminal. Non-Apple-related rewards max out at 1 percent cash back per purchase for the physical card.

The Apple Card doesn’t have any numbers, a CVV, or an expiration date printed on the card, but it does have a magnetic stripe and a chip. If you are paying online at a merchant that doesn’t accept Apple Pay, you’ll use the third way to pay: go back to the Wallet app to generate those numbers virtually. You can either keep the same credit card number or generate a new number for each transaction. This is similar to how banks allow you to create new digital credit card numbers for online payments in order to prevent your information from being misused.

What are the Apple Card’s perks?

With the Apple Card, Apple says it’ll be easier to manage your payments. Apple is using machine learning to translate map data and banking transaction data into the exact names of the stores you’ve visited for the purchases you’ve made, instead of the typical series of confusing corporate names.

The card’s incentives include 2 percent cash back on any purchases you make using Apple Pay and up to 3 percent cash back on Apple products, which includes digital services like Apple News Plus, iCloud storage, Apple Music, and in-app purchases for iOS games. All other purchases grant you 1 percent cash back.

Apple promises you won’t have to pay any fees to use the card. That means no annual fees, no international fees when traveling abroad or shopping on foreign websites, no over-the-limit fees, and no late fees. Still, there’s a major incentive to pay off the full balance each month: like any credit card, you can accrue interest if you’re late on payments. Apple promises no penalty interest rates, though, so the interest rate you see when you qualify for the card is the one you get. Apple will also display an interest estimator to show how much money you’ll owe in interest if you let your balance add up. However, it’s important to note that late payments can still impact your credit score.

Finally, Apple is betting on privacy as one of the card’s perks. Apple says it won’t see what you buy or where you’re buying it. You’ll also need to authorize payment via Face ID or Touch ID, which is one of the reasons you won’t be able to use the Apple Card with an Android device. It also has fraud alerts to notify you of any suspicious activity.

How does the Apple Card stack up to rival cards?

With the Apple Card, Apple has joined the ranks of tech companies like Amazon and Uber, which have their own credit cards. But its rewards lag in comparison: its rivals offer sign-up bonuses while Apple doesn’t. Amazon offers 5 percent cash back on Amazon purchases and a $50 gift card when you sign up. Uber offers 4 percent on all dining as well as $100 back when you spend $500 in the first three months. “Three percent cash back on Apple products is underwhelming,” says Tim Devaney, a personal finance and credit card expert at Credit Karma.

Experts — even from Goldman Sachs itself — agree that the Apple Card could offer better cash back. Apple is hoping to lure customers in with a competitive 2 percent cash back rate on theoretically any product you’d buy — but not every retailer accepts Apple Pay. Citi Double Cash offers the same 2 percent rate 100 percent of the time, Devaney points out.

Other credit cards also provide at least some categories of purchases that consistently offer you 5 percent cash back, say on groceries or gas, although they often rotate the categories every few months. Sometimes those categories include 5 percent cash back on Apple Pay purchases, making Apple’s own 22 percent cash back look meager in comparison.

“I’m not terribly excited by it,” Rivka Gewirtz Little, research director of global payment strategies at the International Data Corporation, tells The Verge. “I’d like to see Apple get more innovative in transforming the way we pay.”

Similarly, the Apple Card’s interest rates of 13.24 percent to 24.24 percent based on creditworthiness aren’t better or worse than competitors’ rates, despite what the company said about “lower interest rates” during its keynote. “If Apple really wanted to blow people away, they would have put a card out there with 0 percent APR. That would have been in line with the whole idea of the iPhone and the iPad completely revolutionizing the industries,” says Devaney. “If they put out a card with 0 percent APR, not just intro, but never an APR, that would have blown everyone away.”

The biggest way the Apple Card stands out is through the convenience of signing up for the card and having it be available right away, says Sarah Silbert, senior credit cards editor at The Points Guy. “It’s not an unattractive option if you don’t carry a balance,” she says, referring to Apple’s fine print on how interest can still accrue if you’re late with payments. “You are getting cash back, so you could do worse.” Silbert notes that users interested in premium designs might be attracted to the Apple Card’s titanium material, similar to how American Express cards are valued for their designs. At the same time, Apple could have offered purchase protection, which would make sense for large purchases on computers and phones, she adds.

One thing’s for sure: experts agree that the Apple Card is designed for iPhone users who already buy a lot of Apple products. Three percent cash back gives them the perk of applying a small discount whenever they pay for Apple products, including services, instead of having to wait for a sale.

What if you lose the card?

In the event that you lose the Apple Card, you can freeze the card and order a new one. Apple says you can continue to use your virtual card in the Wallet app while the physical one is being reissued.

Similarly, Apple’s approach to data privacy differs from other credit card companies: Apple is banking on Goldman Sachs to secure users’ credit card data, which also means that Apple won’t be the one held responsible in the event of a breach. Again, Goldman Sachs declined to comment.

When will the card arrive?

The Apple Card opens for applications in summer 2019. But while the public launch of Apple Card is several months away, Goldman Sachs employees may be some of the first to get the card in their hands. In an internal memo shared with The Verge, CEO David Solomon wrote to employees, “I know many of you are eager to apply for and use our credit card. In short order, the Marcus team will come back to you with details on how we can make this happen.”

For the rest of us, we’ll have to wait until the public launch to find out how the card truly works in practice.