Apple Credit Card: What You Need to Know

There’s a lot to like about the summer: Warm sunshine, picnics, fireworks, long daylight hours, weekend days spent lazing at the beach or curled up in a hammock in the backyard. But let’s get real: If you love all things Apple, all those fun things have been eclipsed, at least partially, by the promised debut of Apple’s long-awaited, much-anticipated, and highly-hyped credit card. The new card’s digital version is designed to tie in seamlessly with the iPhone’s wallet feature for greater ease of use, ramped-up security, and better management of your finances and your spending habits.

Pretty cool, huh? But that’s nothing compared to the physical card. (Yes, in addition to the digital, built-in version on your iPhone, Apple sends out a physical card, a slim, sleek, titanium card with your name laser-etched into the surface.) Like other credit cards, the Apple card has a magstripe and chip; but unlike its competitors, your card number doesn’t appear anywhere on the card, and neither does your CVV, that special code on the back of most card. Once approved for the card, Apple stores a unique ID code on your iPhone. Every transaction you make will require that unique ID code, plus an additional one-time generated security code generated from touch or face recognition software for truly state-of-the-art security and privacy.

How to apply for the Apple credit card

Applying for the card is super simple: Once the card is launched, an option to apply will appear in your Apple wallet app. Just tap on the option and fill out a brief application. If you’re approved, the digital version of the card will be available for immediate use, and the physical card will be mailed to you. Don’t have an iPhone? Then you’re out of luck. The Apple credit card is only for those who have an iPhone — which makes sense since the card is directly tied into the phone’s electronics and software. There’s no paper application and no online application either. It’s all done through the wallet app.

Of course, while having an iPhone is mandatory for card approval, it’s obviously not the only qualification. Like any credit card, you have to meet certain criteria — like having decent credit. So far, Apple hasn’t announced the credit score that’s required for approval, but chances are, you’re going to need to have a good to excellent score — most likely somewhere between 650 and 850. Like any credit card, the Apple card will involve a “hard pull” of your credit report. A hard pull is one that’s recorded on your credit report; most hard pulls stay on for a couple years. Why is that important? Because every hard pull has the potential to decrease your overall credit score, typically by 10 points or more. What’s more, when you have a lot of hard pulls on your credit report (especially when those hard pulls are clumped together), it can make you look “credit hungry” — in essence, desperate for credit. And most credit card companies and other lenders aren’t going to view that as a good sign.

Apple credit card credit score requirement: Do you qualify?

Your credit score is a product of your credit history, which in turn is recorded in your credit report. There are three major credit bureaus, and all three have a report on your credit activity. To make it more confusing, not all cards and loans report to all three bureaus, which means you should really keep an eye on all three reports, at least every year. You can get a complete copy of each report — for free — once every 12 months by going to www.annualcreditreport.com, a site overseen by the Federal Trade Commission (FTC). Getting your free “official” credit reports every year is important — but it still won’t give you your credit score. There are different types of scores, but most credit card companies use either the FICO score or the Vantage score. You can buy your credit score at the www.myfico.com website, but before you do that, it’s worthwhile checking out some free options.

Many credit cards offer free scores, and so do some lenders, including many mortgage companies, credit unions, and even student loan companies. Sites like Credit Karma and Credit Sesame also offer free scores. That’s pretty convenient — but there’s a catch. The scores you get from these free sites may be very different from your actual FICO or Vantage scores, typically varying by 20 points or more. While keeping track of these scores can be useful for seeing how your credit is improving (or declining) over time, they’re not going to be the same scores used by credit card companies to decide if you qualify or not. Still, they can give you a fairly good “ballpark” idea of where your credit stands.

Improving your credit score

If your credit score isn’t high enough to qualify for the Apple credit card when it comes out, don’t despair! You can improve your credit score in a lot less time than you probably think. All it takes is some dedication and good financial habits. That means paying your bills on time to avoid late fees and “dings” on your credit report, and it also means trying to pay more than the minimum to keep your card balances below 20 percent — that means below 20 percent on each individual card and on all your cards added together. These are the two most important “modifiable” factors that affect your score; the other major factors are how long you’ve had credit and whether or not you have any major negative accounts on your score, like charge-offs, bankruptcies, or collections accounts. Even if you have one of these major negatives, take heart: Most fall off your credit report within seven years. In the meantime, you can still build better credit by paying on time and keeping your outstanding totals low.

While the Apple card might have some cachet going for it (as well as some cool security features), it’s certainly not a great card for everyone, even if you do qualify. First, you’ve got to have an iPhone; the millions of people who swear by phones powered by Android or other operating systems are disqualified right from the start, so if you don’t qualify for the card, you’ll have lots of company. Even if you have an iPhone, depending on how you use your credit cards and what’s important to you, there could be other cards that just make a lot more sense. If you travel a lot, a card that rewards you for frequent trips can be a much wiser choice financially; if you carry a balance from month to month, you want a card with a lower overall interest rate. And some cards offer better cashback deals overall or for categories that rotate quarterly. (Check out this post for tips on picking the right card for you.)

What if your score prevents you from qualifying for “regular” credit cards? Then there’s an excellent chance you can qualify for a secured card, where you deposit a certain amount of money that acts as your credit line. Secured cards can be a great way to rebuild credit as long as you use the cards wisely. (See this post for pitfalls to avoid.)

So what’s the bottom line? Simple: If you qualify for the Apple credit card and if it makes sense for your spending patterns and habits, great; if not, you’ve got a lot of other options that could be a much better fit. As with any credit card, do your homework first to make sure the Apple credit card is a good choice for your financial goals.