"...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?
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.
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.
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!
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.
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.
> 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.
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
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.
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.
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.
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.
My guess - people think it is fooling unsophisticated customers into making poor financial choices and buying things they should know they can't afford.
But I'm with you, I don't see it as a big deal. I routinely take advantage of the 'no interest installment plan' for my Apple toy purchases on my Apple card. Why wouldn't I want to hold off on giving them my money for as long as possible, especially in an inflationary environment?
Responsible people have already a lot of easy choices for short term free money. Banks almost literally throw credit cards at people, with 45-60 days without any charge (and even with cashback) - assuming that you can afford it.
It’s free to end consumer, but these schemes make money by charging a percentage to merchants. And those merchants will compensate by bumping up their prices a little to cover the transaction costs.
In the best case, these are pointless services that only transfer money to the finance industry. In the worst case, they incentivize people to spend money on things they can’t afford (and also transfer money to the finance industry).
> Apple Pay Later allows users to split purchases into four payments, spread over six weeks
So you basically have to start paying early, every 1.5 weeks. This seems worse than credit cards where you don't have to pay it up to like 60 days later.
It also seems strictly worse for users than other BNPL's like Affirm where many purchases can be paid over the coarse of several months or years.
Feels like Apple is more and more seduced/mesmerized by the opportunity to provide random consumer services that promise large revenues. Why add yet another new product to your portfolio when you're still struggling so much with software quality?
This business practice seems to have become popular lately. It really gives me a bad feeling, probably because the idea of getting your customers into debt (to your own company) in order to buy your products just seems wrong at a fundamental level. I don't want to live in a world where everything is either rented or paid for with a loan.
I can obviously understand why it makes sense from a strictly money point of view, but what is the business strategy against this? All I can think of is pushing a brand message that is explicitly anti-debt and builds its reputation on treating its community of customers well.
I feel like Apple has lost their way with the focus on services.
If they are going to focus on services, they should make them best in class. I expect best in class software, but Apple Music still doesn’t have anything like Spotify Connect and it is still incredibly slow and unreliable software (for what it is).
I don’t understand how tarnishing the premium brand with BNPL is worth it long term. And I especially don’t understand how all of their 0% interest offers will make sense in a world of 5+% interest rates.
They've been taking the shotgun approach for a while. Their product isn't any individual component, it's the platform as a whole. Why people want a company that sells:
- Phones
- Computers
- Tablets
- Headphones
- AR headsets
- Cars
- Watches
- Streaming boxes
- Speakers
- Email
- Video streaming subscriptions
- News aggregation
- Fitness routine subscriptions
- Music streaming subscriptions
- Video game subscriptions
- eBooks
- Apps
- Cloud storage
- Credit cards
- BPNL
is completely beyond me. Yes there's stuff in there they haven't announced. Yes there are a lot of accessories and services not listed.
I'm probably a Microsoft shill at this point, but I am a .NET dev running Windows and I have a Microsoft 365 family subscription and bought an Xbox. All of my hardware is from other manufacturers. My finances are not tied to MS. I can't think of another company that has gotten the amount of blind trust that Apple has.
Is there some sort of insurmountable tech debt over at Apple that requires these slow rollouts and long development cycles? They announced Pay later at WWDC 2022, and it's just now releasing, and the Savings account was announced in October and would be available "in the coming months", but is only just now (likely) coming out - and given Pay Later is still limited release, I imagine the savings account feature will be as well.
Yuck my two cents. Apples jump into financial services and pay as you go services model has really rubbed me the wrong way. If i get another settings alert that I need to setup apple wallet, sign into icloud or now perhaps a notice that I can “pay later” …… geez I already purchased you laptop … leave me alone and just work.
I've never used a BNPL service, partly because I didn't know if it would complicate the process of returns. Does anyone know if there are complications, for example, if you buy two items and return one of them? Does the merchant give you cash that you then end up using to pay off the full BNPL amount? Or does the refund get routed the other way, to the BNPL service, and then eventually to you?
For users of a reward card, this alternative probably isn't that useful. I'd miss out on 2% cash back, and the zero-interest period is only 6 weeks, which is just a couple weeks longer than the zero-interest period on a credit card (which bills you once a month, effectively giving you 0-4 weeks of zero-interest). I can see how it could be good for younger folks who need to build up credit and can use this to do so responsibly.
[+] [-] bradgessler|2 years ago|reply
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.
[+] [-] JumpCrisscross|2 years ago|reply
"...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?
[1] https://dcurt.is/apple-card-can-disable-your-icloud-account
[+] [-] commoner|2 years ago|reply
[+] [-] joshmanders|2 years ago|reply
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.
[+] [-] BiteCode_dev|2 years ago|reply
If google shots down your account, you are out of docs, youtube, gmail... This can literally kill your career.
Not to mentions all the "sign up with google/apple" you used.
[+] [-] jeffy90|2 years ago|reply
[+] [-] Ocerge|2 years ago|reply
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).
[+] [-] 999900000999|2 years ago|reply
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!
[+] [-] vineyardmike|2 years ago|reply
[+] [-] gnicholas|2 years ago|reply
[+] [-] sorenjan|2 years ago|reply
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".
[+] [-] __derek__|2 years ago|reply
[+] [-] SkyPuncher|2 years ago|reply
The use case here seems to be people who would not actually be able to pay this off in a month.
[+] [-] hammock|2 years ago|reply
[+] [-] lm28469|2 years ago|reply
People make poor decisions, a lot of people make poor financial decisions, what is a great tool when you're educated is a catastrophe for others
The new wave of "pay later" payment systems is clearly a way to artificially boost consumption in the short term
[+] [-] kylehotchkiss|2 years ago|reply
[+] [-] imwithstoopid|2 years ago|reply
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
[+] [-] bootloop|2 years ago|reply
[+] [-] cal85|2 years ago|reply
[+] [-] MagicMoonlight|2 years ago|reply
It’s 1000% better
[+] [-] jonfw|2 years ago|reply
[+] [-] kzrdude|2 years ago|reply
But sure, it's exploitative, they want a piece of that already existing cake.
[+] [-] tantalor|2 years ago|reply
> [users want] flexible payment options
Being able to spread some large purchase over multiple pay periods seems like a obvious use case.
[+] [-] gumby|2 years ago|reply
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 :-)
[+] [-] hot_gril|2 years ago|reply
[+] [-] keiferski|2 years ago|reply
[+] [-] umeshunni|2 years ago|reply
What's the business model for all these BNPL companies if they have zero fees and zero APR?
Are they counting on some % of users requiring extensions?
Are they getting a % of transaction value as fees?
[+] [-] dcchambers|2 years ago|reply
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.
[+] [-] w10-1|2 years ago|reply
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.
[+] [-] logicalmonster|2 years ago|reply
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.
[+] [-] imtig3rman|2 years ago|reply
[+] [-] rykuno|2 years ago|reply
[+] [-] rootusrootus|2 years ago|reply
But I'm with you, I don't see it as a big deal. I routinely take advantage of the 'no interest installment plan' for my Apple toy purchases on my Apple card. Why wouldn't I want to hold off on giving them my money for as long as possible, especially in an inflationary environment?
[+] [-] not_your_vase|2 years ago|reply
BNPL usually don't target these people.
[+] [-] pythko|2 years ago|reply
In the best case, these are pointless services that only transfer money to the finance industry. In the worst case, they incentivize people to spend money on things they can’t afford (and also transfer money to the finance industry).
[+] [-] kimbernator|2 years ago|reply
[+] [-] gmd63|2 years ago|reply
[+] [-] zeroonetwothree|2 years ago|reply
[+] [-] lxgr|2 years ago|reply
If you pay a credit card in full, you also don't pay interest, and you usually get at least a month to do so as well.
If you don't pay on time, though, you lose big – with both credit cards and BNPLs.
[+] [-] annexrichmond|2 years ago|reply
So you basically have to start paying early, every 1.5 weeks. This seems worse than credit cards where you don't have to pay it up to like 60 days later.
It also seems strictly worse for users than other BNPL's like Affirm where many purchases can be paid over the coarse of several months or years.
[+] [-] kruuuder|2 years ago|reply
[+] [-] kart23|2 years ago|reply
[+] [-] keiferski|2 years ago|reply
I can obviously understand why it makes sense from a strictly money point of view, but what is the business strategy against this? All I can think of is pushing a brand message that is explicitly anti-debt and builds its reputation on treating its community of customers well.
[+] [-] n8cpdx|2 years ago|reply
If they are going to focus on services, they should make them best in class. I expect best in class software, but Apple Music still doesn’t have anything like Spotify Connect and it is still incredibly slow and unreliable software (for what it is).
I don’t understand how tarnishing the premium brand with BNPL is worth it long term. And I especially don’t understand how all of their 0% interest offers will make sense in a world of 5+% interest rates.
[+] [-] pathartl|2 years ago|reply
- Computers
- Tablets
- Headphones
- AR headsets
- Cars
- Watches
- Streaming boxes
- Speakers
- Email
- Video streaming subscriptions
- News aggregation
- Fitness routine subscriptions
- Music streaming subscriptions
- Video game subscriptions
- eBooks
- Apps
- Cloud storage
- Credit cards
- BPNL
is completely beyond me. Yes there's stuff in there they haven't announced. Yes there are a lot of accessories and services not listed.
I'm probably a Microsoft shill at this point, but I am a .NET dev running Windows and I have a Microsoft 365 family subscription and bought an Xbox. All of my hardware is from other manufacturers. My finances are not tied to MS. I can't think of another company that has gotten the amount of blind trust that Apple has.
[+] [-] cal85|2 years ago|reply
[+] [-] judge2020|2 years ago|reply
[+] [-] roody15|2 years ago|reply
[+] [-] armchairhacker|2 years ago|reply
[+] [-] gnicholas|2 years ago|reply
For users of a reward card, this alternative probably isn't that useful. I'd miss out on 2% cash back, and the zero-interest period is only 6 weeks, which is just a couple weeks longer than the zero-interest period on a credit card (which bills you once a month, effectively giving you 0-4 weeks of zero-interest). I can see how it could be good for younger folks who need to build up credit and can use this to do so responsibly.