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Apple Card's fine print: 7 things you should know about Apple's new iPhone credit card

Thinking of getting the Apple Card? Read this first.

apple-card-vendor

Apple Card was designed for the iPhone.

Apple
This story is part of Apple Event, our full coverage of the latest news from Apple headquarters.

The Apple Card has our attention. Apple's new mostly digital credit card that's an extension of Apple Pay promises approval within minutes, up to 3 percent cash back, no late penalties and virtually no additional fees to use. Issued by Goldman Sachs and Master Card, Apple's disruptive payment card almost seems to be too good to be true. 

Maybe it is. We dove into the fine print to see what kind of details we could uncover about the card. We're by no means trying to dissuade you from signing up for an Apple Card -- we can't wait to try it out either -- but as with all credit cards, there are ins and outs to know when choosing the right one for you.

Here's what we learned by reading Apple's footnotes.

You still have to qualify

During the Apple event on March 25, the company's presentation made it seem like anyone could open the Wallet app, apply for the Apple Card and begin using it a few minutes later. That may be the case for many, but you still have to qualify to be approved for an Apple Card. Apple hasn't shared the details, but made it clear that you will need to qualify:

US customers can now sign up for the latest news about Apple Card on apple.com/apple-card. Apple Card will be available to qualified customers in the US this summer.

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You can still earn Daily Cash rewards without an Apple Cash account

Daily Cash is what Apple calls a 1 to 3 percent cash back reward you get every time you use Apple Card online or in stores. So what's Apple Cash and why is that relevant? Good question. It appears to be related to the Apple Pay Cash card, which includes a peer-to-peer cash exchange system like Venmo or PayPal that lets you send money to other people using iOS. You can also use it to shop in stores, in an app or online just as you would with a credit card linked to Apple Pay. Expect these two names to merge in the future.

Apple says that an Apple Cash card is required for receiving Daily Cash, but if you don't have an Apple Cash account: 

Daily Cash can be applied by you as a credit on your statement balance. Daily Cash is subject to exclusions, and additional details apply. See the Apple Card Customer Agreement for more information.

The Apple Card also comes with a physical card made of titanium.

Apple

There's a limit to unlimited Daily Cash rewards

Apple crowed about unlimited Daily Cash rewards, which means that there's no arbitrary cap on how much cash back you can earn. So, for example, if you were to spend $6,000 buying iPhones ($999 at Amazon) for the family, you could earn $180. If you spent more than that, you could earn more, too.

That's all theoretical. In reality, you'll top out if you try to exceed your credit limit. So if your limit is $3,000, you'll only be able to earn $90 in Daily Cash until the next billing cycle. If you max out at $10,000, you'll be able to earn up to $300. 

The credit limit is a standard part of being issued a credit card. Typically the better your credit and longer your duration using a credit card, the more credit your bank will extend you over time.

apple-card-hand-iphonexs-payment

Apple Card is an offshoot of Apple Pay.

Apple

Keep an eye on interest estimates

One Apple Card feature that Apple celebrated is the ability to track how much you owe using the app. If you don't pay off your balance at the end of the month, you can tell the app how much you're paying. Apple's software will then estimate the interest cost for you, so you can see how much more you'll have to pay down to clear your balance.

The fine print here isn't a "gotcha," it's just a reminder that the estimate is based on your balance at the time you're using the app. Pending transactions and other purchases you make before the end of the billing cycle don't enter into the interest estimate.

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Late payments will cost you

Let's talk about fees. Apple Card won't slap you with fees if you're late to a payment, and there are no annual fees, international fees or fees for going over your limit. All that's great.

But yes, there is a catch. While Apple won't charge you a penalty for missing a payment -- for example, no $25 late fee in addition to what you already owe -- you'll still get charged interest. According to Apple's website:

Late or missed payments will result in additional interest accumulating toward your balance.

In other words, Apple isn't giving you money for nothing.

Interest rates still apply (of course)

Speaking of interest, Apple didn't discuss interest rates specifically when it showcased the Apple Card, but looking into the footnotes of its website, they become clear: 

Variable APRs range from 13.24 percent to 24.24 percent based on creditworthiness. Rates as of March 2019.

Software might change, but no big surprise there

The final takeaway from the Apple Card fine print isn't very shocking. It's that the Apple Card software is subject to change as Apple goes through iterations of its app and service. 

However, that's enough of a reminder that software, like services, change and mature. Apple Card's terms and services could alter before it launches this summer, so if you are interested in signing up for a card, it's a good idea to check the terms and conditions before signing on the digital line.

Originally published March 25.
Update, April 3: Refreshes wording.

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