Apple Card Review: No Fees and Daily Cash Back

Apple is famous for doing things differently, and the Apple Card is yet another example. It charges absolutely no fees, a rarity in the credit card world. Transactions are color-coded and easy to follow, and cash back gets deposited daily.

But there are a few notable holes in its list of features. Read our detailed Apple Card review for a full breakdown of what it offers and to see if it's worth getting.

This credit card is a good fit for: iPhone users who want an easy-to-understand credit card with zero fees and cash back.

Features and benefits

The Apple Card provides a different experience than your typical credit card. Your card and transaction information is all available on your iPhone, and like everything Apple makes, it's well-designed and easy to use. It has a mix of standard credit card perks and some that you don't see often -- or from any other card.

A card that eliminates fees and encourages you to avoid interest

Unlike most credit cards, the Apple Card has no fees. That means:

• No annual fee
• No late fee
• No foreign transaction fee
• No over-the-limit fee

It's always nice when you don't need to worry about fees when, for example, you miss a payment or make purchases abroad. Just keep in mind that if you don't make your payment for 30 days or longer, it can hurt your credit score.

This card charges interest, but Apple put a unique twist on it. Most card issuers are more than happy if you only make minimum payments on your credit card bill. It works out well for them, because people end up paying quite a bit of interest this way.

When you're making a payment on your Apple Card, it shows you an estimate of how much interest you'll end up paying, based on the payment amount you choose. It will show you a new estimate each time you change the payment amount. This is a fantastic tool that I haven't seen from a credit card before. By seeing how much interest could cost you, it motivates you to pay more.

RELATED: How Credit Card Interest Works

Cash back that you can use right away

The Apple Card is a cash back card, and it earns:

• 3% on purchases made through Apple
• 3% on purchases made through Apple at select merchants that have partnered with Apple, when you pay with Apple Pay
• 2% on purchases made through Apple on other eligible Apple Pay purchases
• 1% on purchases made through Apple on other purchases

These are reasonable rates. The card isn't the biggest earner, but you should have plenty of opportunities to earn at least 2% back. Apple reports that over 85% of U.S. merchants accept Apple Pay.

Apple also handles cash back differently. You get your cash back every day in the Wallet app. From there, you can use it however you like. Apple even offers a high-yield savings account, and you can have your cash back automatically deposited there. Most card issuers pay out cash back once a month, so the Apple Card makes the process much faster.

Interest-free installment plans to pay off Apple purchases over time

As every Apple fan knows, Apple products aren't cheap, but they're worth every penny. Now, the best way to pay for products like these is in full with money you've saved already. That way, you don't end up in debt, making payments on your new iPad or MacBook.

But sometimes you don't have time to wait, like if you need a new computer for school or work. With the Apple Card, you can pay off Apple products interest-free in monthly installments.

Plan options range from six to 24 months, depending on the product. Most of Apple's product lines are eligible for a payment plan, including the iPhone, MacBook, iPad, and even the Apple Vision Pro.

Add family members to your account for convenience and to build their credit

It's easy to share your account with Apple Card Family. This is similar to adding authorized users, which most credit cards let you do. But with Apple, there are two types of users you can add:

• Co-Owners: You and another adult, such as your spouse, can merge credit lines to form a single, co-owned account.
• Participants: You can add anyone who is 13 or older to your Apple Card account so they can learn to use credit responsibly. Those who are 18 and older can also build a credit history this way.

The option to add a Co-Owner is something you don't see often anymore. Very few card issuers offer joint credit cards, where two adults share responsibility for a single account. The Apple Card lets you do this, so it's perfect if you and your partner want to completely merge this part of your finances.

Drawbacks to know about

The Apple Card is unique, which has its advantages and disadvantages. On the one hand, it offers some interesting benefits that most credit cards don't. But it's also missing important benefits that most credit cards have.

The rewards program could use some work

Although this card earns cash back, there are much better options available. Its biggest problem is that it doesn't have a sign-up bonus. Many credit cards offer these for new cardholders, and even with no annual fee cards, you can find sign-up bonuses worth $200 or more. With the Apple Card, you may need to spend $10,000 before you earn that much cash back.

The bonus categories on the Apple Card are also lackluster. The only 3% categories are Apple and select merchant partners where you use Apple Pay.

Other cards earn 3% to 5% back in much broader bonus categories, like groceries, gas, dining, and entertainment. Or, you could get a card that earns a flat rate of 2% on purchases, without any requirement to use Apple Pay. Make sure to look at other credit card reviews to see how the Apple Card compares to what else is available.

LEARN MORE: The Ascent's Best Cash Back Credit Cards Hub

Missing useful extras, including credit monitoring and purchase protections

The best credit cards generally have exciting perks that get all the attention, as well as more low-key extras. Even though they aren't as popular, these extras can be useful. Here are some of the most common examples:

• Free credit monitoring to keep you up to date on your credit score
• Purchase protection covering new purchases that are damaged or stolen
• Extended warranty coverage
• Complimentary rental car insurance

Those are just a few examples of benefits you can get from lots of credit cards -- but not the Apple Card. It doesn't offer purchase protection, something that would be very nice to have on an expensive new MacBook, iPad, or AirPods. This may be the Apple Card, but for buying Apple products, I'd personally pay with a card that has purchase protection.

The Apple Card doesn't have a tool to check your credit score, either. That's surprising, considering Apple's focus on educating consumers about how much interest they'll pay. You'd think it would also want to help them stay on top of their credit rating. You can at least get your credit score online for free, but it doesn't change the fact that many other cards make this easier for you.

RELATED: How to Find Out Your Credit Score

Apple states on its website that a FICO® Score of above 660 is considered favorable for approval for the Apple Card. Many factors are considered during the underwriting process, and approval isn't guaranteed with a higher score or impossible with a lower score.

Apple provides several examples of reasons an application could be declined on a support page. These include:

• You're behind on debt payments or have previously been behind.
• You have negative public records, such as a tax lien or a bankruptcy.
• You're heavily in debt or have insufficient income to make debt payments.
• You frequently apply for credit cards and loans.

RELATED: Best Credit Cards for Fair/Average Credit

The Apple Card can be a smart choice if you're building or rebuilding your credit, because its benefits compare favorably to other credit cards for consumers with fair credit. The fact that it explains how much interest you'll pay based on your payment amount also makes it useful if you're new to credit cards.

Anyone who has good or excellent credit, meaning a FICO^® Score of at least 670, is better off looking elsewhere.

With a credit score in that category, you can qualify for some of the best credit cards, and the Apple Card doesn't make that list. It's a solid card, but if you shop around, you could find plenty of cards with higher cash back rates, sign-up bonuses, and/or more valuable 0% intro APR offers.

OTHER OPTIONS: Best Starter Credit Cards for No Credit

Our credit card methodology

At The Motley Fool Ascent, we rate credit cards on a five-star scale (1 = poor, 5 = best). Our rating criteria includes rewards rates, welcome bonuses, fees, and perks like travel credits and 0% intro APR offers to evaluate our ratings.

We combine these factors with an evaluation of brand reputation and customer satisfaction to ensure you're getting the best card recommendations. Learn more about how The Ascent rates credit cards.