"...my bank account number changed in January, causing Apple Card autopay to fail. Then the Apple Store made a charge on the card. Less than fifteen days after that, my App Store, iCloud, Apple Music, and Apple ID accounts had all been disabled by Apple Card."
Wouldn't the same thing have happened if he didn't have an Apple Card, but instead had his credit card decline not only on their Apple subscriptions, but also the MacBook they traded in?
He paid his iCloud with his Apple Card, but didn't pay the credit card bill properly, so they basically clawed back the purchase.
The analogy is that if I pay for Netflix with Amex and miss an Amex payment, they can't directly cancel Netflix. Eventually if I continute to not pay, they'll shut down the card and Netflix won't be able to charge and will then cancel themselves, but that's a much more flexible process.
It's always good to have a few "fire breaks" between your most important accounts (email, payments, domains, etc.).
At what point is a situation so convoluted that it can be considered an edge case? Because this story seems like it would qualify! Not only did someone's bank account number change without intervention but it seems Apple also got something wrong about the purchase on two different occasions (saying OP bought an iphone, not a macbook and applying the trade-in to their card without confirmation)...I take your point. But, wow.
Im frankly surprised AC works this way, all of my interactions with AC support and Apple makesit seem like one wants nothing to do with the other.
> did someone's bank account number change without intervention
Their bank account number changed for reasons unrelated to Apple. That caused their Apple Card monthly payment to fail. Which caused their payments to Apple, for subscriptions and a trade-in, to fail. So Apple cancelled their subscriptions.
Agree the support communication on iPhone versus MacBook is imprecise. But nothing indicates Apple acted improperly or in a manner they wouldn't with anyone else failing to pay for their services.
> At what point is a situation so convoluted that it can be considered an edge case?
People have edge cases all the time! Failing gracefully in edge cases is a critical feature for anything that's so deeply wired into your life like a payment processor or a cloud account!
For US residents, the Apple Card is not a competitive credit card. There are enough credit cards with no annual fees offering at least 2% cash back on all purchases that the Apple Card's 1% back on general purchases is not a good value. Just about every credit card issuer in the US supports Apple Pay as well, allowing these 2% cash back cards to match the Apple Card's 2% on Apple Pay purchases.
People keep saying things like this, and rarely offer up the name of any better card when asked.
Apple Card offers 2% cash back on all Apple Pay purchases, which... exactly matches my no-fee card from Chase. Except I have to choose how to use the 2% from Chase when it eventually is available, while I can spend Apple's 2% the next day via Apple pay. I threw the metal card in a drawer when it arrived, so if your goal is tell people not to use the physical card, then sure, I'm with you. But I don't think that's the primary use of the card.
Fidelity has a flat 2% card which has no annual fee. The cash back then automatically transfers to my brokerage account where it immediately loses money in the stock market, so maybe it works out to less than 2% :)
Citi also has a widely used cash back card for ~2%
The Fidelity card really is a great general purpose low maintenance card. Plus, if your default cash position is SPAXX, it's currently earning 4.4% interest which isn't too shabby.
Citi’s card has a 3% foreign transaction fee though, making it completely unusable abroad. Fidelity also charges 1%.
I’m actually not aware of any 2% card without any catches (Apple’s being that 2% is only for Apple Pay transactions, which is anything but ubiquitous when shopping online.)
> I’m actually not aware of any 2% card without any catches
The Bread Cashback Card (American Express)[1] and SoFi Credit Card (MasterCard)[2] give 2% cash back on all purchases with no foreign transaction fees, no annual fees, and no other "catches".
Yeah the foreign transaction fee is annoying on many cards - I don't have too many cards but I keep a travel focused card (capital one venture) for international travel.
it looks like the fidelity card cashback even exceeds 2% if you have a large brokerage account with them, which is cool. but it looks like you do need an active brokerage account with them to use the card at all. a good deal if you'd like to have a fidelity brokerage account anyway, but imo citi doublecash is the better general recommendation since it doesn't have the same cross-product dependency.
I never redeem points for purchases. I always apply them to a billing credit. If you redeem points for a purchase you don't accrue points on that purchase.
Chase of course goes out of their way to make this as painful as possible. Currently their app is broken and points can't be redeemed for cash. There is also no way to automatically apply all points to a statement credit. My perception that this is the best use of points is reinforced by how much effort they put into trying to convince me to do something else.
> I never redeem points for purchases. I always apply them to a billing credit.
This may not be a good redemption. For Chase UR points specifically, you really ought to transfer them to Chase Sapphire Reward card and redeem them for travel ($100 in points becomes $150 in travel) or transfer them to airline/hotel partners for redemptions. For example, you can often find Marriott, Hilton, and Hyatt points redemptions that are substantially better (sometimes more than 50% off) than the cash value of the points.
My last Hyatt hotel stay, I redeemed 8,000 points per night for a hotel room that was listed at $267/night. In cases like this, you can more than triple the value of your points.
It's definitely more effort to manage and there is a point of diminishing returns. But even if you just transfer to Chase Sapphire Reserve and redeem for travel (ignoring individual airline/hotel rewards programs), you should get a 50% bonus vs redeeming the points for cash.
To be fair, I've searched for this kind of thing before, and the results are usually plagued with so much sponsored content that it's hard to tell what's really a good deal and what's something someone's being paid to tell me is a good deal. (I feel this way about pretty much all financial advice online, for better or worse.)
Brave throwaway, you underestimate the knowledge you possess! You should be proud of your knowledge and gladly share it, rather than mock those unwilling to expend the effort you've expended to earn such knowledge.
Search results are plagued with spam to the point of uselessness, and this is precisely the sort of information I would not trust from an LLM because their sources are, as I said, plagued with spam and I don't want to chase hallucinated results.
In fact, for all that it's a trivial question, this is at least the fourth time I've asked it, and the first time I've gotten real answers--although not from you.
Perhaps the issue is that you don't seen to realize I've never gotten less than 2% from my Apple Card, and I get 3% back from Apple purchases? (Since I just bought an iPad Air + accessories for my daughter's birthday, that alone saved me more than $50!)
The Fidelity card you mention seems to require a Fidelity account, but that's okay, since I have one. However, the terms then seem identical to my experience with the Apple card.
I got my Apple card before Chase updated my cards from them to be tappable, and basically I use the Apple card for Apple Pay (2%) and purchases/subscriptions from Apple (3%), a Chase Amazon card for purchases from Amazon (5%), and a Chase Sapphire physical card (2% or 5%, depending on category) when a physical card is required (rarely these days, but at Walmart for one). It's not clear to me how Fidelity is any better than Apple card in this scenario.
Again, none of what you're saying makes sense. Spam doesn't prevent you from looking into the details of an offer. Hallucinated results don't stop you from looking up the details of a card offer.
It also seems like you've now changed your story and are explaining all the cards you have which outperform apple's.
You seem really defensive and agitated over this triviality. No one is mocking you for your mistakes. It's just that what you've said doesn't make sense, and is inconsistent. Please, just take it as honest feedback.
Hahaha, what an odd response! I mean, explaining how your tone was condescending while mine clearly expressed wry amusement would just be me being defensive now, right? So I won't.
My point stands: From the time this card was first announced, people online, especially on this very site, have been dismissing it as having "sub-par" terms, and yet when pushed, all of the alternatives offered up seem to be similar, or even worse.
Of the three credit card bills I (auto-)pay off every month, Apple card has by far the biggest bill, because I use Apple Pay a lot. When I travel to Hong Kong, I love the lack of foreign transaction fees, and still the easy convenience of tap-to-pay with my wristwatch everywhere.
I do have a Chase Sapphire Preferred card that also has no transaction fees--but it costs me $95/year, so I'd judge that to be sup-par compared to Apple's free card, except that I use it to book travel, so the cash back goes farther.
I'll look into the CapitalOne SavorOne that somebody else mentioned, but generally I don't look forward to spending hours of my life comparing nearly-identical credit cards, so I was glad to get some real answers this time!
Q. what is the best general-purpose cashback credit card?
A. As an AI language model, I cannot recommend a specific financial product, but I can provide some information on what to look for when choosing a cashback credit card.
[Information on what to look for: Cashback, signup bonuses, annual fees, redemption options, and credit score requirements.]
It's possible Bing's AI does better, but I don't use the Edge browser, so I don't know.
That seems to give the same 2% I already get with my Apple card, but only 1% immediately, and the other 1% when it's paid, making it not as good as my Apple card's 2% immediately.
I have a Chase Amazon Visa card that gives 5% back on Amazon purchases and some % on the rest. I happen to buy a lot from them (although less and less as I see more counterfeit-looking brands).
My Goto card is Paypal 2% for everything, and 3% for PayPal (so online Walmart, ebay, anything which offers PayPal), as soon as txn goes through. Synchrony Bank's own mastercard also offers 2% on everything, at every statement end. Wells Fargo Active Cash also offera 2% everywhere. I use Wells Fargo Autograph for 3% stuff like Travel, Food. Discover & Chase come out only if there are 5% offers or categories. Capital Ones get only 99 cent charge a month to get it forgiven.
Apple card only for apple purchases, 0% apr && 3% cashback. I use android phone, so no apple pay possible. I wish it allows to be added to google pay with nfc.
Apple Card is very convenient, but it's not the best in the rewards arena.
For example, CapitalOne SavorOne (3% for many categories) and Wells Fargo Active Cash (2% on all purchases). There are many others that are competitive for specific situations though, including Citi Custom Cash (5% in a single category). Most of these cards also offer an intro APR and/or bonus after $X has been spent.
Definitely true, but this means that you have to spend some time and effort on using the "right" card for any given type of purchase, and staying on top of any changes to your rewards as well, to say nothing of having to juggle multiple due dates and automatic or manual payments.
A flat reward on everything definitely has its appeals. (The Apple Card isn't quite that, though – paying online without Apple Pay only gives you 1% rewards.)
Its better in that it gives 2% on all purchases and can be (but does not need to be) used with Apple Pay, while Apple Card must be used with Apple Pay to receive the 2% cash back.
It's 2% back anytime you use Apple Pay, though. Which I use, a lot, and it's nice not to think about which card to use in that scenario, which I imagine was their point. I know there are plenty of cards that will give 2% cash back on any transaction, too.
None have privacy guarantees, and usually those rates are extremely subject to change, require quarterly activation, variable APR, high foreign transaction fees, or many other annoyances.
The Apple Card's issuer (Goldman Sachs) and payment network (MasterCard) retain just as much transaction information for the Apple Card as they do for any other credit card.[1]
> usually those rates are extremely subject to change, require quarterly activation
That's not true. I'm not aware of any US credit card offering 2% cash back on all purchases that regularly changes this 2% rate or requires quarterly activation for the 2% rate. If you can name even one 2% cash back card that does this, please do.
> variable APR
The Apple Card also has a variable APR. The Apple Card Customer Agreement says that the APR is "15.49% to 26.49% when you open your account" and "After that, this APR will vary with the market based on the Prime Rate."[2]
The Bread Cashback Card (American Express) and SoFi Credit Card (MasterCard) manage to offer 2% cash back on all purchases with no foreign transaction fee or annual fee.
It's not bad for using to buy Apple Products, but if you're only using one credit card, might as well get something that gives 2% on all purchases unless you reallllly buy a lot of Apple products.
not sure what your point is. cash back cards aren't really interesting to me. you're better off not overspending on things that don't add to your quality of life than worrying about whether you're getting 1-3% cash back.
i do have a premium travel card that gives me points for dining and travel but these come with high annual fees so you're paying for it in a different way.
The point is that most people don't bother to juggle cards to get the best cash back each time; they just pick one and stick with it (which is why companies PAY Costco big bucks to be their card provider).
If it’s at 0% why not (genuine question). That’s just free money, right? Obviously the interest on $300 isn’t much but if you take 0% loans on everything where it’s available it will add up eventually.
On the flip side since most people like to share scary stuff because when things are going right, nothing is worth sharing...
I put 75k or more worth of transactions through my Apple Card in 2022 and I've had nothing but wonderful experiences with the whole thing, including with Apple and Goldman Sachs.
Same. I use my Apple Card instead of cash or my debit card in almost all cases (except Costco where I have to use Visa and I have their card for that). I've averaged a little over $27K/year since 2019 and have had zero issues. GS has been great when I've had to dispute charges and they took care of everything. I love how seamless it is and it just works. Also, I am a self-admitted Apple-whore and am totally invested in their ecosystem FWIW.
> except Costco where I have to use Visa and I have their card for that
I imagine this is due to some dispute with Mastercard on their fees for credit cards (you can use MC debit at Costco); Visa probably gives Costco a steep discount on fees.
My point (theory) is that Mastercard isn't offering them a big enough volume discount. If they could pay 0.1% I doubt they would exclude MC even if it meant losing out on some Costco credit card accounts.
I'm saying excluding other card brands gets them a bigger discount from their exclusive card network than volume alone would, not that it pushes people to the Costco-branded card from that network (though it probably does that, too.)
Well, Apple’s metal card doesn’t have NFC capabilities for security and to incentivize pulling out the phone for purchases. The metal card only gives 1% back while using the phone gives 2%.
The Apple Card is great because Goldman decided to get in the business of selling two dollar bills for a dollar as a growth hack. That's not something that will last forever.
What do you mean? In the US where Apple Card is offered, the 2% back for Apple Pay transactions seems sustainable. The only thing that has put GS into question is [0], but that's just overlending likely at the request of Apple to get Apple Card in more hands.
> Goldman Sachs spent a lot of money to help launch Apple Card and its other consumer services. A report from January 13 revealed the bank's consumer credit division lost $1.2 billion in nine months last year, and the losses were primarily related to the Apple Card.
> "In the consumer platforms, we did some things right. We didn't execute on some others," Solomon told CNBC on Wednesday. "We probably took on more than we should have, you know, too much, too quickly."
> Goldman helped launch the Apple Card in 2019 and reportedly spent roughly $350 to acquire every new Apple Card customer. And in 2022, it scaled back its efforts to turn its consumer savings business, Marcus, into a fully-fledged digital bank.
> Executives of Goldman's collection of businesses known as Platform Solutions believe its consumer division may break even in 2025, although that target was initially by the end of 2022. However, the bank isn't giving up on the Apple Card.
> "I think we now have a very good deposits business," Solomon said. "We're working on our cards platform, and I think the partnership with Apple is going to pay meaningful dividends for the firm."
Apple Card has Mint integration now as a way to get bulk CSV. Mint being an Intuit product in 2023 is problematic in its own ways, but the Mint <=> Apple Card OAuth flow suggests it may be an API others can (eventually, with effort) request access to.
Can you elaborate on this? (If it's too traumatic to talk about no worries. I'm just curious.) If I recall when my spouse changed her name after we got married, she also had to send in the appropriate government documentation. Are you saying that you were able to just call up AmEx and say, "Please change my name from Y to X" and they just did it without any requirement to prove it was still you? (That sounds like a huge security hole, if so.) I'd be interested to understand this in more detail if you're up for explaining it. But if not, I understand.
Their name change policy really is a bit ridiculous. I know somebody that had their first name printed in lowercase on the card because Apple/GS absolutely refused to change the first letter to uppercase without a birth certificate. Photo state ID would not do…
That said, asking for official documentation for a name change seems like standard bank policy. Are there banks that make this easier?
The linked post doesn't actually say "If you don't pay your credit card bill we disable your iTunes/iCloud"
What it actually says is "If you don't pay your credit card bill, we decline new transactions since you're at your credit limit. If your iCloud uses your Apple Card and that transaction is declined, then your iCloud may be disabled."
Apple apologists should probably work on replacing their "bUt GoOgLe!" routines, since people have largely moved on from the Google ecosystem as a whole - and in some cases, like this one, Google is not even present in the same market (credit cards).
My laptop died recently, and I went with an M2 MBP. I went in expecting to pay it in full, but with no interest/fees, why wouldn't I choose this? It beats inflation, even if only minimally.
Seems predatory towards people who are buying stuff they can't afford, otherwise I don't see how they make money (minus the overpriced laptop I just bought, I guess).
It's very easy for this to push people into buying more than they need.
90% of people are fine with an M1 Air, the last time I went to an Apple store the sales clerk straight up refused to sell me one. He basically told me I didn't know what I was talking about and kept trying to sell me a pro.
I asked him 3 times to sell me an Air, and ended up leaving in frustration. Not before he pitched buying a pro on an Apple line of credit instead.
If I come into a store and tell you what I want to buy, we're not having a conversation. You have no idea what or who I'm buying it for.
Best Buy doesn't do this, I was able to get my Air without an argument and walk out.
If anything, this pay later stuff will make the issue worse. You'll go into the Apple store to be told you might as well get the most expensive thing they have in stock, it's zero down anyway!
Oh it gets better than that, I walked into the store and asked to buy a MacBook Air.
The first clerk disappears, and some kid who is roughly 19 starts lecturing me about how much better the pro is. I politely respond, I just want to buy the Air.
He insists, 'well , do you want to make music '. I respond, 'please sell me the Air'. At this point he's not budging. I ask a final time, and ask why are you making this interaction so difficult.
Him: 'well you're making it difficult'.
I walk out and go to Best Buy. At Best Buy I simply asked to buy an Air, and I was out in 5 minutes.
Now truth be told, if the kid would have told me he needs to push a certain number of pros per month, I might have said okay and brought one. But instead he decided to insult me, I even explained that as a software engineer I knew exactly what I was talking about. I shouldn't need to explain anything when I'm trying to buy a product, it's none of your business if I prefer an M1 air because I routinely dropped my laptops. If it's a gift for someone else, or in reality it does the job I need it to do.
I'm legitimately never going into an Apple store again after this.
That is shocking to me, and you'd be doing everybody else a favor if you let the store know about it, so that guy can be terminated or at least retrained. I've never had an experience anything like that, and I know that's not the norm at Apple stores. Wow!
Ohh that's just mean, I'm not trying to get anyone fired. I'll just never shop at an Apple store again. I'm sure plenty of people walk in wanting to spend the least amount possible.
Then end up leaving with a 2500$ computer, no big deal it's only 200$ a month.
You certainly have no responsibility at all to help a multi-trillion dollar company fix themselves! Nor to ever shop with that company. You do you!
That said, I hope my comment and the subsequent upvotes make it clear that your experience seems very unusual. I have never felt pressured to buy anything on my numerous visits, and was even talked into buying a cheaper option of two things I considered once, and another time it was suggested I go to Best Buy rather than buy anything from Apple.
They're not paid commission to avoid situations like the one you described, so it's really strange to me that happened. That's all!
Other comments down stream indicate they do have KPIs. Maybe the kpis are for financing, I'm not sure. Someone who goes into a store only looking to buy a MacBook Air is probably doing so because of cost.
So logically you want to push as many people into buying more if you want to sell the financing.
Regardless, the entire point of BNPL is to encourage you to buy more than you need.
Well, do be aware... I don't think that Best Buy _technically_ pays commissions based on sales, but they do often have reps from brands around who will try to sell you heavily on their product (e.g. Samsung reps.)
I've also heard stories that while you won't get a commission, you may get more perks at work for higher sales numbers.
In any case, your experience at Apple sounds insane.
Best Buy isn't perfect, but in general they're much lighter on the 'advice' they try to give you. Their commission is in selling useless warranties, if a clerk does a good job I'll buy one as a tip.
There's no commission at Best Buy. IIRC, Circuit City was the last major US-based electronics retailer to end commission-based sales, and that happened in... 2004, maybe? Something like that.
Employees are judged on warranty sales, and when I worked at Circuit City back in the days when they, uh, existed, we were also judged based on profitability of sales.
> Now truth be told, if the kid would have told me he needs to push a certain number of pros per month, I might have said okay and brought one.
Which is why they nag you. I don't really understand this mindset but there's no question it exists. And there's no question the paperclip machine will have its goddamn paperclips.
Probably the 19yr old will eventually get turned into Solyent and replaced with a more polite/savvy version - and you will succumb and buy a pro you don't need just to be nice. And numbers will tick upwards.
What's weirder about this is that... most 'pros' really need more than stock stuff you can get at a retail store anyway. If you need an M2 MBP, you probably want it to be 64g or 96g, and probably want 2tb storage. I've never seen anything but stock/base configurations at retail stores (best buy, apple, etc). Perhaps they occasionally have variations? Or the stores I've been to are just... lower on the priority list for top-end configurations?
If you want to talk about what 90% of people are "fine" with, honestly it's a Chromebook.
I have a Chromebook I bought in 2018 for something like $200, and it's "fine" for gmail, online banking, youtube, and other casual stuff. I have an ssh app on it to use for work, and that's "fine" as well. Most people don't need more than this.
Do the apple sales people get commission? I seldom enjoy working with people looking to influence me to do something so that they can grow their comission.
If I've gotten any kind of general attitude at all from Apple Store employees since the pandemic, it's mainly one of "Why are you here?" Maybe this employee wanted to take advantage of the rare opportunity to do something other than retrieving people's pick-up orders and actually try to sell something, but this is deeply untypical for shopping at the Apple Store.
This is what they used to be good at - not trying to sell you too hard.
I guess that has changed - I also had several strange unpleasant interactions lately. Either difficulty buying something, or annoyance being sold on something more or something else.
I get trying to upsell you, but why would you turn down a sale? Make the suggestion and then let the customer purchase whatever they want. A sale is a sale, no?
Remember, it beats inflation in a theoretical sense, but only if you actually will do something with the extra cash today. If your salary won’t change during the loan, and you’re not investing the money you didn’t spend, then you’re not realizing any gains against inflation. In fact, you’re just giving yourself less money tomorrow, when inflation should make other goods more expensive.
My only catch is this loan requires a soft credit report - I have a freeze on most of my credit scores (used to be there were only 3 now there are a few more). Even a soft pull will hit that barrier.
Hypothetically, you could pop that money into a checking account with extremely marginal interest and still make money. Better in your pocket than Apple's, I guess.
The $25 you might make from saving $1000 is, to me, not worth the cost of having a reoccurring debt to service. Especially in the face of layoffs etc. I suppose someone might say a monthly payment is preferable to less savings in that situation… so I guess the financing could work in your favor depending on your situation.
A 0% is always better than paying upfront. There is the money you make from your saving account, the safety of having more available savings...
The only downside of taking a 0% loan is if you're bad at finance and getting that loan makes you spend more. Either by buying something more expensive that you would without the loan, or buying more stuff with the money you didn't have to give upfront.
It only applies up to $1,000, and if you used an Apple Card you'd get 3% back on your purchase. If your purchase happened at the beginning of your credit card month, you'd also get 4 weeks of free float, versus the 6 weeks you get here. Doesn't seem like an amazing deal, if a reward credit card is an option, and assuming they'd give you the same thousand dollars of credit.
I think the OP is referring to the financing options available for larger hardware purchases, which is separate from this program.
I bought my M1 MBP using the financing they offer and it was 24 months, no interest, _and_ you do get the 3% back immediately upon purchase. They also set up the payment plan for you so you do not have to worry about missing a payment and getting charged interest you were intentionally avoiding.
It's a great option if you are on top of your finances, but the point remains that it can easily be used to live outside of your means.
Isn't max credit card float closer to 7 weeks? If you buy something the day after statement close, it takes 4 weeksish to issue another statement, and is due in another 3 weeks. Obviously if you bought at the wrong time in the cycle, the day before statement close, your float can be as little as 3 weeks.
Just to add, a store person in Modesto Apple told me in order to get 0% apr for 24 months on new phone, that phone has to be tied/locked with a carrier for the duration of loan. I knew that was a load of crap, as 24 months is between me & bank/apple card/goldman. Its not like phone will be held as security. So I paid in full by apple card, and called apple card customer service right outside of store right away, and they made it a 0% apr 24 month plan, with no change to unlocked phone.
> Seems predatory towards people who are buying stuff they can't afford, otherwise I don't see how they make money (minus the overpriced laptop I just bought, I guess).
That's exactly why they're doing this, to get people who can't afford Apple's products to buy them anyway. Compare with what Tim Cook said in February:
> The price of the most expensive iPhone model has increased by more than half — from $962 to $1,600 since 2009 when adjusted for inflation — but Apple CEO Tim Cook doesn't appear worried about increasing prices.
> During an earnings call with investors on Thursday, Cook said he believes people are willing to pay more because the phone has become "so integral into people's lives."
> "I think people are willing to really stretch to get the best they can afford in that category," Cook said, responding to a question on whether the increasing average sales price over the last few years is "sustainable."
"Willing to really stretch" is just another way of saying "spending more than they should".
If you're in the US and have good credit, you can do better by opening a credit card with a 0% APR period for 12+ months in addition to a sign-up bonus (e.g., Chase Freedom Unlimited, Amex Blue Business Plus), although that takes a little more effort.
My score is always in 660-760 range over yearly view, and many of my cards are around 24 to 29 % apr. But as you said, I pay all of them every month, so zero interest paid since 2019. Only a credit unions rewards visa is 12%.
You don't need to pay it off every month during the intro APR period: pay the minimum for the first N statements, then pay the full balance, and you'll pay $0 in interest or fees.
Just don't forget, because if you're late paying off the balance they will usually charge interest retroactive to the opening date of the account (not sure that is the case in this specific example).
If one is worried about forgetting, this probably isn't a good hack, but it should be possible to (a) buy a T-bill or CD maturing near the balance due date and (b) use Bill Pay to schedule a payment for the balance due.
It's always good to understand what the policy is on an offer like this, but most credit card intro rates are not like this - it is typically store charge accounts that offer "12 months same as cash" that accrue interest and add it if not repaid during the time offered.
PayPal Credit (a specific credit line) does that. Discover, Wells Fargo, Chase, Capital one, all wanted to start interest from the date intro apr ended.
Even if you pay everything each month the company makes 2-3% on you minus whatever cash back, which is 12-30+% a year on your monthly spend. You just don’t see it directly.
The use case is people who do not qualify for a traditional 2% cash back or equivalent credit card. Surely Apple does want people who can pay their Apple BNPL debt per the schedule.
When you do BNPL you forgo the credit card rewards you would otherwise get, which can easily be valued at 3-5% of the purchase (I.e. more than the benefit of taking the free credit)
the target is uneducated (in the financial sense) consumers who are enticed into making purchases they might otherwise not make (and probably shouldn't make)
Apple probably wants to get at the consumers who are still buying cheap Android phones who will be bowled over by the psychology of splitting the purchase price into installments
This is honestly disgusting predatory behaviour which seems to be rampant in Fintech right now. The majority of people they are targeting for this service shouldn't be put in the position to have this available to them.
lol wut. son, spend 10 minutes reading about payday loans, many of the big economic crashes, shady practices by banks, and crypto. fintech isn't a thing, it's just a way to enable already existing behaviors that finance does all the time; it's always been predatory.
BNPL schemes are (or at least were as of a year ago) destroying Gen Z. This one may be less destructive as it doesn't look like interest rates are a thing, but still. Don't get into the habit of spend ing money you don't have.
Speculation, but the lack of interest rates is probably more destructive. The profit here comes from more usage on Apples cc system rather than some other bank taking the rake. Apple is incentivized to make “spending money you don’t have” as easy as possible - it directly benefits from it - and thus makes it even more appealing with no interest rates.
QuadPay, Affirm, Apple now, there are SO many schemes going on to entice people who can't actually afford things to buy them with credit and destroy themselves financially. It's very common and your request for data strikes me the same as if you had asked if there's data on whether the Sun shines. It's just so obvious it's mind-boggling to question it.
But buying a MacBook Air can be a best investment if a person want to be a developer or designer. I agree that it's generally bad, especially for wasting for something like fashion or too expensive iPhone Pro.
I am surprised to see Apple getting into the "buy now, pay later" game, as it's always seemed like a murky industry that works by exploiting poor people who aren't very good with money, and not something I'd expect Apple to want to be associated with. Can anyone steelman it for me? Is there a way of looking at this industry/practice other than "exploitative and predatory"?
A credit card lets me delay payment for a month otherwise it’s 30% interest. These schemes let me delay for multiple months for free otherwise it’s 8% interest.
Feels to me that something like this cheapens Apple's brand.
I don't mean to imply that they had an expensive brand and this changes the demographic (I hate businesses like that), I mean their brand, as far as I can tell, is "high quality, thought through, and works well".* This feels like they are exploiting their existing customer base.
* Pls don't argue if you disagree on the actual quality or whatever. This is about how it looks to me that they position themselves. Feel free to argue about how they might be positioning themselves :-)
They already cheapened their brand beyond this when they created a credit card. CC is another form of BNPL, but more importantly, it's the most gimmicky business out there.
They did not create a credit card. Goldman Sachs (GS) does all the financial work, and gives Apple a cut for the branding.
Same thing here. GS is doing the underwriting, Apple is just providing the tech to be able to access the customer at the point of sale and make a split second automated offer for GS to lend money.
Edit: I was wrong about GS doing the underwriting. The website states:
>Apple Pay Later is offered by Apple Financing LLC, a subsidiary of Apple Inc., which is responsible for credit assessment and lending. Apple Financing plans to report Apple Pay Later loans to U.S. credit bureaus starting this fall,5 so they are reflected in users’ overall financial profiles and can help promote responsible lending for both the lender and the borrower.
My take is that the real business opportunity for Apple here is fraud reduction, not just the Apple branding.
The biggest cost to any credit card provider is fraud, which they have to cover. Credit card fraud is $100B+/year. The Apple Card requires an iPhone and by leveraging iOS they can cut down on fraud. This lets them negotiate a better cut of the revenue from Goldman Sachs.
I suspect the iPhone integration even cuts down on fraud when you use the physical Apple Card directly. Leveraging location and activity data from your paired iPhone/Apple ID probably gives them many useful signals for fraud prevention. And you'll notice that Apple seems to have extra logic for detecting jailbroken iPhones when you try to sign up for the Apple Card or add it to your wallet. (App Store and various other Apple services still work, but not the wallet/Apple Card related features when jailbroken)
See my other comment, but I just read that when you use Apple Card + Apple Pay together they give you 2% cash back. To me this really seems like more evidence that the fraud prevention of Apple Card + Apple Pay works well enough they can make this offering.
Maybe, but I think if that were really the case, they would have at least offered 2% cash back on all purchases to be competitive with other credit cards. That is the baseline free credit card that anyone credit card worthy can get.
Apple Card does offer 2% cash back on all purchases! But only when you pay use an Apple Card via Apple Pay, not when you pay with the physical card. I suspect this is because when Apple Pay is used they have particularly good fraud prevention allowing them to offer this in that case.
Lots of other cards give 2% cash back without Apple Pay and Apple’s advantages in fraud prevention, so I would expect Apple to be able to offer even more cash back if they wanted to attract other credit card users.
Branded financing options have nothing to do with brand prestige. Luxury car brands do it. High fashion houses do it. High street department stores have been doing it longer than either of us have been alive. It doesn't turn anyone off to a brand.
Basically every single retail business brands a credit card. What difference would it make? Every airline, hotel, and retail store offers their own branded cc. Even Costco does, and that is about as high of brand reputation as you can get.
Yes, exactly. Those aren't seen as tech companies. Apple has cheapened their brand to that of an airline or hotel, or Costco at best. It's not terrible, but it's not the visionary company it used to be.
This is nothing new. Apple's been in the BNPL finance game since the original iMac was introduced - so if they're tarnishing the brand, they've been doing it since they completely rebooted the brand.
In 1998, you could finance a G3 iMac with a loan for ~70 months of $29 payments. They also started up a store-only credit card finance option sometime in the early aughts via Barclays.
I'm aware that they've always offered financing, as many do, but it wasn't branded as a product like the Apple Card is. The product was the iMac. This time, the product is the card itself, complete with a brand name and heavy advertising. They're likening themselves to Citibank or Walmart.
I agree completely. Maybe it's just nostalgia, but I really cannot imagine Apple doing this under Steve Jobs' management. He would have rejected it simply for seeming tacky and reminiscent of products in low quality industries.
I was thinking the same thing. My understanding was prior to iPhone, phones were purchased outright, typically costing a couple hundred dollars, and there wasn't such a thing as paying off the phone as part of your monthly cell phone bill.
I have always purchased my phones outright, but am curious if there are fees, interest, or a higher total cost of payments via financing (fees and interest on missed payments).
That's the only justification I could use to say "maybe Steve would be good with it".
> I was thinking the same thing. My understanding was prior to iPhone, phones were purchased outright, typically costing a couple hundred dollars, and there wasn't such a thing as paying off the phone as part of your monthly cell phone bill.
This was absolutely a thing before the iPhone. Many carriers offered Blackberries, Palm Treos, and even higher end dumbphones and featurephones at discounts when you signed a service contract.
The merchant pays at least double the rate compared to a normal credit card transaction fees. Merchant pays more for the payment processing and gets better conversion.
But Apple BNPL applies to all merchants that accept Apple Pay. I cannot imagine that Target/Albertsons/Trader Joes/Costco/etc agreed to pay an extra 3% in payment processing fees if their customer chooses to use Apple BNPL.
I am referring to this line in the bitsaboutmoney.com article:
>BNPLs pitch themselves to businesses as more marketing efforts and less simple payments rails. They’re more expensive than cards by about 300 bps.
I assume this is all the same as Goldman Sachs’ Apple credit card. The same payment fees from merchant to Goldman Sachs, and then Apple might get a little too. Since Goldman is taking all the underwriting risk, I would be surprised if Apple is getting the lions’ share.
Apple’s reward is their devices becoming more popular among people who cannot get credit cards and might find utility in Apple BNPL.
If it works like here in Australia, the merchant pays a very high fee, but in return, there are no chargebacks and the BNPL financer pays straight away.
So in return for a high rate (merchant fee for AfterPay here in Australia is 4+%) the merchant gets guaranteed payment and no chargeback risk. The BNPL service makes money on the merchant fees and on the fact that this lending appeals to young people and those with low credit scores.
It's an extension of what used to be called "lay-by" here, but in that case, the merchant wouldn't release the item until it was paid in full.
It's both a form of credit and marketing. Some people don't like credit cards for whatever reason.
It's not a lot of credit since you have to pay it back pretty quick, but it does have a similar benefit to paying with a credit card and then paying the monthly statement.
> I understand this is instead of the 2% cash back that Apple Card pays on full payments.
That would reduce the appeal a little. And that's different than their own-store policy on their card -- if you buy from Apple with an Apple Card on the installment plan, you get the 0% for 12 months or whatever, and you get the 3% cash back too.
Thanks for the 2% comment, by the way. Made me go look, since I only recall it being 1% (for most things). Turns out it's 2% whenever I use my Apple Watch to do the transaction. Works for me!
I do not think Apple negotiated with every merchant that accepts Apple Pay for a higher fee for Apple BNPL payment. The fact that any Apple Pay transaction qualifies makes me think the regular payment processing fee for a credit card is what Goldman Sachs/Apple get.
One of the most valuable life lessons my parents ever taught me was "If you can't afford it now, you can't afford it at all."
YES, there is a time and place for financing (especially when interest rates were near zero and you have good impulse control) but the entire "buy now pay later" industry just reeks of preying on people that aren't as financially literate or have little impulse control, and I won't touch the companies with a ten foot pole.
Honestly a bit disappointing to see this from Apple.
I used to have this opinion, and I try to take as little debt as possible. However, I've change my opinion in recent years, and I now think it's based on a privileged position that not everyone is in.
Buying a new phone today rather than once I've saved up is a luxury, but buying a replacement phone today rather than being without a phone for ~months while saving up could bring with it significant costs – making it harder to access employment, healthcare, or to socialise. Similar examples would be things like car repairs.
Cash flow is worth something, businesses have known this forever, and people living paycheck to paycheck are typically experts in how to make their money work as well as possible because they're so close to the edge. I trust them that if they think this is the best option for them, it probably is. Payday loans are in the same category here (and businesses call them "commercial paper").
Now, I'd love to live in a society where this isn't necessary, but that's not the world we live in, so I'm in favour of these things being available for those who need them.
A more practical version of this rule is "don't use long term debt to pay for short-term expenses"
When buying a car, or house, or maybe something like a phone that you will use continuously for a number of years, you can make an argument that it's OK to pay for that item over the same time period.
Where people get into more trouble is buying consumable stuff like clothes, food, etc. on to a credit card that they don't pay off every month, and then they end up paying for a box of macaroni or package of underwear over many years (at typically double-digit interest rates).
Payday loans are in the same category but in terms of predatory financial options i feel as though they are a million times worse. I even question how apps like Dave work on this type of model.
Well it's actually boiled down to if you make money with your laptop. I guess most people on HN are programmers so of course they do. But the question is not good laptop vs crappy laptop, it's consumption vs investment.
The BNPL industry isn't some big charity. They offer such deals to hook people in, knowing that a huge chunk of them will miss payments and then they can hit them with interest and fees.
Exactly. However, I think a bigger advantage of this business model is that it simply sells more stuff. It’s way easier to look at your monthly take home income and justify $100 per month for 12 months than a 1 time purchase of $1200. However, the problem is when you make those justifications, it becomes easier to make 10 of those purchases and achieve a debt-income ratio of 5.0 instead of budgeting and keeping a lower debt-income ratio over time.
> It’s way easier to look at your monthly take home income and justify $100 per month for 12 months than a 1 time purchase of $1200.
I think you should note that for apple, they are splitting payments into 4 over 6 weeks. So your example wouldn't fit the discussion we're having here.
Thank you. That is exactly how people do in countries where splitting payments have been established and common for a long time, making everybody live on the edge in order to prop up consumer spending.
If you actually save your money to only buy things when you can afford them, you can more easily purchase more expensive stuff with cash, since you've already saved up a chunk, and you are also much better prepared for unexpected costs.
The lesson I taught myself is to amortize everything so it's thought of as $/time. An upfront purchase has an opportunity cost.
Also, most people can't pay for a house upfront. Mortgages are effectively govt-subsidized, so you usually want one anyway. I directly care what the house will cost me per month, and the bid price is only part of that.
I initially purchased my new iphone 12 in monthly installments, yes I could have paid for it outright, but I didn't see the point in paying ~1k upfront.
If you're referring to a carrier's zero interest payments on the full price of the phone, that's just smart. No penalty for borrowing. If there was interest involved, it gets fuzzier.
I'll amend this by saying that there's also another huge requirement for it to make sense: The new iphone must be necessary for any of this deal to make sense. If it was impulse bought because of this financing offer, then the financing has cost you >$1k
Last I checked, my carrier (T-Mobile) charges like 10% more than Apple for the same device. They're just baking the interest into the price, it's not really "no interest". Maybe the others don't do that, though, I dunno.
I agree in spirit but buying things in installments is just a reality here in Brazil and in a lot of other countries.
It's a loan like any other. When used correctly it can be a democratizing function for people who are poor but need important things like phones, fridges, and stoves.
If you have impulse control and can properly conceptualize a loan, it could be a useful tool. In my experience, however, these kinds of programs don't target responsible spenders. People are pretty bad at thinking about monthly cost in terms of total cost.
Totally agree that it's best for responsible people. But what is Apple's goal here — to increase the number of people/merchants using Apple Pay or hitting people with unexpected interest payments, which would sour them on the Apple brand? I would think that they're trying to grow their ecosystem, rather than make money while alienating customers. I could be wrong though — when times are tough, even good companies do lousy things.
I don't really think Apple's interest is in collecting interest on these payments, but I do think it will cause people to use Apple Pay more because it enables (perhaps encourages) them to buy things they otherwise wouldn't buy. That can be good or bad depending on the circumstances, I just expect this will be frequently utilized in an "impulse buy" sort of way because it creates an illusion of affordability.
You think Apple is lying about this? Or you think that they are hoping that you miss payments and then they (a three trillion dollar company) are going to make a material amount of money on an interest penalty?
> Or you think that they are hoping that you miss payments and then they (a three trillion dollar company) are going to make a material amount of money on an interest penalty?
Maybe? I don't know how much banks make from this kind of thing. That "(a three trillion dollar company)" comment is so irrelevant that it's almost laughable tho. Banks are huge companies too, and they still make money from interest.
Yes, banks are large precisely because they make money this way. The point is that Apple makes huge amounts of money by selling tech products and services, and by having a loyal following. It would be surprising if they decided to trade some of that goodwill for a relatively (in their world) amount of cash.
Essentially, Apple. Goldman is getting their pay in transaction fees. Apple is hoping to increase the number of purchases made on Apple's products. You get cash back on each transaction, Goldman gets a percentage of each transaction, Apple just loses a tiny bit of their profit on the sale, but they still made the sale. The only issue then is that debt collection is more expensive. The truth, however, is that most people pay their debts.
Interesting given that JP Morgan lost $1B last year on the Apple card due to failing to correctly model the creditworthiness of customers.
Also surprising that the 3% transaction fee on cards has held up for decades; one would expect that competition would bring it down. Instead, it's created an opportunity for all sorts of businesses.
What I like most about this is that the Apple UI makes it dead-simple to see exactly what you spent and what you owe. To my mind, this is the huge benefit of Apple Pay services: instead of mindlessly throwing the card into any slot and getting a shock at the end of the month, you see your status at any time, including what you just bought. I believe this has huge benefits for people living hectic lives to manage their finances.
Apple's ability to win in personal financial services depends on their ability to reduce the errors, friction, and confusion that lead to support calls and missed payments. Unlike banks and cards that depend on a plethora of dark fees that confuse consumers, Apple's gambit is to smooth it out, particularly for the unsophisticated. If Apple can set the standard for the industry, I'm all for it. (Yes, I'm lookin' at you, GE Capital.)
Are services a distraction for Apple? Goodness, Apple is the economic size and complexity of a small country. Rather than dumping money into buying unrelated companies or X-moonshots that only puff egos, Apple management seems focused on incrementally extending the Apple way where it makes sense: to bring goodness to TV and credit cards and underserved markets, to tax their supply chains with best practices, etc. I wouldn't do it any differently.
This seems like a logical and interesting service that should drive quite a few sales for Apple as people impulse-buy status symbols they shouldn't really try to afford.
My big concern with using some of these "pay later" types of services is that it seems incredibly risky to your credit score even if you do everything right and pay it off on time.
If Apple or anybody else can clarify on this point, that would be great. Otherwise, I'd never touch this.
You used the word "typically" in the last post, which isn't a very precise or confidence inducing word when dealing with something important to your life.
https://dcurt.is/apple-card-can-disable-your-icloud-account
I refuse to get an Apple Card until they firewall the two and make them independent of each other.