One of my favorite credit cards isn’t a physical card. It lives entirely in my phone, and I use it for purchases every day — despite the fact that it offers less cash back on most transactions than competing cards that don’t have annual fees.
But it offers convenience and easy financial management tools, and it works seamlessly with the device I use the most in my daily life: the iPhone.
I’m talking about the Apple Card*.
If you are among the more than 110 million people in the U.S. who have an iPhone, the Apple card may make sense for you, too. I applied for it earlier this year, attracted by its cash back rewards, financial wellness tools, and lack of an annual fee.
The card lives entirely in my iPhone in the Wallet app, where I can make contactless purchases, see how I’m spending my money, and pay my balance, all directly from my phone. That has made it easier for me to identify my spending habits and budgeting shortfalls, and make financially healthier choices as a result.
It’s one of the main reasons I prefer it over most cards in my wallet right now, despite its relatively mediocre rewards and the lack of a sign-up bonus.
Here are a few other reasons why I love the Apple Card, and you might too:
What I Like About the Apple Card
Applying for the Apple Card, which is issued by Goldman Sachs, was straightforward and fast. Within five minutes of opening my Wallet app, I completed my application and was approved. I could begin using the card for in-person or online purchases immediately; most places now accept Apple Pay.
You can apply for an Apple Card without affecting your credit score. It’s only when your application is approved, and you accept the card’s terms and conditions, that a hard inquiry is made, which then may impact your credit score.
I also requested the physical metal card, which is optional, and actually earns less than using the digital version. That’s why I have an incentive to use Apple Pay with my Apple Card because I earn 2% cash back doing so, versus 1% cash back when using the physical card.
The cash back rate is upped to 3% when shopping at Apple and specific merchants using Apple Pay. Current merchants at 3% cash back include Duane Reade, Panera Bread, Walgreens, Exxon Mobil, Nike, T-Mobile, Uber, and Uber Eats. At merchants that don’t accept Apple Pay, I can use the physical card at that 1% cash back rate.
Once I’m ready to upgrade my iPhone, which is usually every two or three years, I’ll be able to finance it interest-free on my Apple Card while also earning 3% cash back.
Cash back never expires, and it’s deposited into my account daily. I can use these rewards to pay for purchases at stores using my mobile wallet, make payments toward my card balance, send peer-to-peer payments to friends, or deposit them into my bank account.
Another perk is that the Apple Card doesn’t charge any fees: no annual or late fees, no foreign transaction fees, and no fees for going over the credit limit.
But my favorite thing about the Apple Card is that it puts the important information I need to see front and center to manage my credit card.
Everything I need to know about it is a click away on my phone in the Wallet app; there’s no need to log in to a website. I can see my card balance, spending levels for the month, and latest transactions in real time. Each category of my spending is color-coded, so it’s easy to spot trends when reviewing my monthly and yearly credit card activity. It also has a tool that estimates interest charges based on the balance for a given month, which helps me visualize the actual cost of carrying a balance.
You can also help others in your household build credit by creating an Apple Card Family, which allows five different members of your household (or anyone else you choose) to be authorized users on your account.
Keep in mind you’re responsible for any payments on your account by any authorized users in your Apple Card Family group. Still, it can be an efficient way to monitor your household spending and have everyone in your home earning rewards together on purchases.
What’s Missing From the Apple Card
I’ll be the first to acknowledge that the Apple Card has its downsides.
To maximize this card, you’ll need an iPhone or iPad. If you don’t have one, you’ll have little use for the Apple Card. And if you lose your phone and don’t have the physical card, you’ll also lose access to the account and to being able to make purchases, at least temporarily.
The card doesn’t come with many bells and whistles. For example, it doesn’t offer a sign-up bonus or benefits like purchase protection and extended warranties. If you’re after rewards or benefits that can be used for travel, it’s not a good choice either. But because the Apple Card is a Mastercard, it does offer a range of other benefits, including fraud protection, identity theft protection, and a free ShopRunner membership that provides free two-day shipping from some websites.
The card’s rewards structure also falls short of top competitors because of the limited amount of 3% cash back categories, while 2% cash back is available only on Apple Pay purchases. You’ll only receive 1% cash back when you use the actual card.
If you’re not an iPhone user, there are other cash back credit cards that will get much more value from your regular spending. The Citi® Double Cash Card*, for example, offers 2% cash back rewards on every purchase you make (1% cash back when you buy, plus 1% as you pay for those purchases). That’s regardless of whether you pay with a mobile wallet or not and also has no annual fee. The Blue Cash Preferred® Card from American Express, with a $0 introductory annual fee for the first year and $95 after. It has cash back rewards that we deemed “exceptional” in some categories, like 6% at U.S. supermarkets for the first $6,000 you spend every year, then 1%. And if you’re looking for a travel rewards card, then the Chase Sapphire Preferred is our clear winner among cards with an annual fee under $100.
- Intro bonus:N/A
- Annual fee:$0
- Regular APR:See Terms
- Recommended credit:(No Credit History)
- Learn more At our partner’s secure site
Citi® Double Cash Card
- Intro bonus:N/A
- Annual fee:$0
- Regular APR:13.99% – 23.99% (Variable)
- Recommended credit:670-850 (Good to Excellent)
- Learn more At our partner’s secure site
Blue Cash Preferred® Card from American Express
Even though the Apple Card doesn’t charge fees, keep in mind that it does charge interest on balances that aren’t paid in full. The card’s variable APR ranges from 10.99% to 21.99%. It also doesn’t allow balance transfers, which doesn’t make it ideal for people looking to consolidate existing debts.
Having my credit card tied to my iPhone means I can use my phone to pay, with no need to even carry a physical wallet, at least where I can pay electronically. While this keeps me locked in the Apple universe, it is extremely convenient.
Since I regularly use Apple Pay and purchase Apple products, the card’s rewards program works for me. Additionally, I see a lot of value in the financial wellness tools that come with the Apple Card.
Whether you find the same usefulness in the Apple Card ultimately depends a lot on how committed you are to staying in the Apple ecosystem. If you are not an Apple user or loyalist, then there are cash back cards out there that will offer you greater value for no annual fees.
*All information about the Apple Card and Citi® Double Cash Card has been collected independently by NextAdvisor and has not been reviewed by the issuer.