What is an Apple Card?
The Apple card is a product from the house of Apple Inc., and its financial side is managed by Goldman Sachs, USA. It was made primarily for Apple Pay, but you may also use it as a standard, non-contactless credit card.
Your card can be used for in-store and online shopping/purchases on the iPhone, iPad, Apple Watch, and Mac. You can also use this card to pay utility bills, repay a buddy via Messages, and transfer cash to your bank account. Apple Card also comes in the physical form and can be used to make offline payments, such as at stores/businesses where Apple Pay isn't accepted.
There are no annual, foreign transactions, over-the-limit, or late fees with Apple cards. They come with a rewards program that provides you with up to 3% cashback on every purchase. Moreover, the APR (Annual Percentage Rate) for purchases ranges from 11.74% to 22.74%.
What Credit Score Do I Need for the Apple Card?
Apple considers the FICO (Fair Isaac Corporation) score for Apple cards. It is the most widely used credit score and ranges from 300 to 850. You should have a FICO credit score of over 600 to qualify for an Apple card.
However, your FICO score isn't the only factor determining whether you're qualified for an Apple card. Apple believes that FICO scores don't necessarily convey the complete picture of an individual's financial health. That's why Goldman Sachs considers a wide variety of data to gain a better understanding of your creditworthiness, including:
- Data from the TransUnion bureau, which shows your credit performance on past and present financial commitments.
- The annual income you declare while applying for the Apple card.
- Your history of debt repayment is formed by your previous credit activity.
- The discretionary money is after meeting your monthly debt commitments.
- If necessary, your available payment history with electricity, gas, telecom, and other utilities.
If your initial request is denied, you can follow the Path to Apple Card program to earn credit and become eligible for this card by accomplishing credit-building tasks.
Is It Possible to Get a Cash Advance from Apple Card?
No, you won't be able to receive a cash advance on your Apple Card because there is no such facility available with this card. However, you can use it to make purchases wherever Mastercard credit cards are accepted.
Pros and Cons of a Credit Card Cash Advance
A credit card cash advance has both advantages and disadvantages:
- Fast Cash: Most credit card cash advance providers let cardholders withdraw cash from their credit line. It implies that a sufficient credit limit makes things fast, such as you won't be asked to file an application, evaluate your credit score and financial information, or deposit collateral.
- Trouble-free Withdrawals: When the credit card issuer allows cash advance, you may withdraw money by visiting an ATM or bank.
- No Loan-like Credit Check: A loan from banks or credit unions is approved only after a hard credit inquiry. However, there is no such evaluation with cash advances.
- Low Minimum Payments: In the case of cash advances, the credit card issuer allows borrowers to pay back the money in small monthly installments.
- Additional Fees: Many credit card issuers charge an additional fee (typically 3% - 5% of the total amount advanced, with a $10 minimum). You may pay even more if an ATM is not associated with your credit card.
- High APR: The cash-advance APR ranges from 25% to 27% for most credit cards. Moreover, interest will start accruing immediately because there won't be a grace period.
- Affects Credit Score: Increasing credit card debt can raise credit utilization and lower credit score. The higher credit usage negatively impacts the credit score because outstanding amounts contribute to 30% of the credit score.
- No Remedy if Cash Advance is Stolen: Credit card issuers do not provide any protection for unauthorized transactions.
What Are the Alternatives To Credit Card Cash Advances?
These four options may be better alternatives to credit card cash advances:
Loan from Families/Friends
You can approach your friends and family members for a no-credit-check short-term loan. This type of borrowing may be embarrassing for some, but maintaining a professional demeanor might help. Use a professionally completed written agreement explaining all provisions. Be sure you’re both clear on the repayment terms and interest.
A personal loan is another option, but a good credit score is required to qualify. In some cases, interest rates on personal loans are lower than cash advances, even after factoring in additional charges. WeLoans can assist you in connecting with an appropriate lender for personal loans up to $35,000.
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You can also borrow from your 401(k) plan. The interest rates and fees vary according to the plan administrator and employer but are usually lower than cash advances.
There isn't any credit check, and you can set up repayments as automatic withdrawals from your paychecks. Note that funds borrowed from a 401(k) don't generate investment returns and might affect your retirement.
Roth IRA carrying funds for retirement can also be an alternative to credit card cash advances, but consider it only when all doors are closed.
As Roth IRA contributions are after-tax funds, IRS regulations allow withdrawing them at any time without penalty or additional tax. If you are under 59.5 years old, do not take more than your contribution.