How Apple's New Credit Card Actually Works

It's been five years since Apple Pay first launched, and these days it's just about everywhere. It's accepted by 70% of merchants in the U.S., and this year alone will see 10 billion transactions on the platform. Suffice it to say, Apple Pay is rapidly changing the commerce landscape, and now, Apple is digging even deeper into fintech with the launch of its first ever credit card: Apple Card.

In partnership with Goldman Sachs and MasterCard, Apple Card is a credit card designed specifically for iPhone users. It's built into Apple's Wallet, where you can manage your spending and make payments right in the app. While it won't be available until this summer, ahead, we're breaking down the ins and outs of the new card and what makes it different from the rest on the market.

Once Apple Card becomes available this summer, iPhone users can sign up right in the Wallet app and, if they qualify, begin using it right away wherever Apple Pay is accepted — in stores, online, or in apps.

The card will have an easy-to-follow dashboard that lets you track your weekly and monthly spending activity. Apple Card also uses machine learning and Maps to provide clear vendor names and locations when you're looking at your transaction history (instead of the confusing codes you're used to seeing on your typical credit card statement) and organizes purchases by category with color-coding. These thorough insights into your spending will look the most accurate, of course, if you're doing all or most of your spending with your Apple Card instead of dividing purchase between two or more cards.

Also, you can reach customer support 24/7 just by texting through Messages.

Perhaps the most exciting feature of Apple Card is Daily Cash. Rather than redeeming your rewards points for cash at the end of the month, Apple is simplifying cash back by giving it to you every day. Once your transaction has been settled, you get the cash back for each transaction right on your Apple Cash card, to be used as soon as you'd like to.

Here's how it works: for every Apple Card purchase you make using Apple Pay, you get 2% Daily Cash (no matter what you're purchasing). If, however, you use the physical Apple Card, you only get 1% Daily Cash back. Which means if you're dining out, and it's time to pay the check, you might opt instead to use a different credit card that has better restaurant rewards. Still, the difference between 1% and, say, 1.5% cash back is, most of the time, negligible enough for it not to make a real difference. Make a purchase at the Apple Store, on the App Store, and for Apple services, and you'll get 3% cash back. For each transaction you make, you can see the exact amount of money you're getting back in an itemized list. Once the cash is on your Cash card, you can do basically anything you want with it, like send a friend money over Messages, pay down your credit card balance, purchase anything using Apple Pay (if you have a balance on your Cash card, you can elect to pay using that rather than your Apple Card), or even deposit into a bank account.

Apple Card has no annual, late, international, or over-the-limit fees, or even penalty fees for missed payments. As far as interest, Apple says its interest rates will be "among the lowest in the industry." Apple Card will also give you payment options and show you how much interest you'll have to pay on different payment amounts. To keep your interest as low as possible, Apple Card will suggest payment amounts and let you schedule them more frequently.

One of Apple Pay's best features is its high security, which will of course carry over into Apple Card as well. Each Apple Pay transaction is authorized with Touch ID or Face ID and its own unique security code. Apple also doesn’t know where or how much you spend — all of that information remains stored locally on your device.

When you sign up for Apple Card, you have the option of requesting a physical card to accompany your digital one. And IRL, it's really sleek. It's all-white titanium, and the only text on it is your name — no number, CVV, or expiration date. All the card info can be found in the Wallet app, though, in case you need to read the info over the phone or you're shopping on a website that doesn't accept Apple Pay.

Still, you get the most bang for your buck by using your Apple Card via Apple Pay whenever you can, since you get more Daily Cash this way than you would with the physical card.