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.

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).

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 :-)

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?

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.

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.

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.

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.

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.

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.

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.

> 4. Upon purchase, a user’s Apple Pay Later loan and payment history may be reported to credit bureaus and impact their credit.

What? Doesn't that footnote directly contradict the text that references it?

So in addition to the soft pull requirement, it's clear this is almost exclusively targeted at people with good finances.

Not being able to use a credit card is a huger bummer though. Buying something like a macbook pro is a decent way to meet the minimum on a credit card with a signup bonus if you're not a high rolling spender normally.

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!

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".

The use case here seems to be people who would not actually be able to pay this off in a month.

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

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

Yes, this. And it's worth it for the merchant because they make more sales. patio11 has a good article about it: https://www.bitsaboutmoney.com/archive/buy-now-pay-later/

https://www.bitsaboutmoney.com/archive/buy-now-pay-later/

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 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 assume the merchant fees are the same either way.

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.

Seems like a good deal – Apple is giving away money for free, especially given current interest rates.

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.

They can't raise prices on the latest iGoodies if no one can afford to buy them.

Buy Now Pay Later can ensure users "can afford" the latest iGoodies instead of having to wait for the price drops on not-the-newest iGoodies.

They are being innovative and enabling their own business to succeed despite the current economic conditions.

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.

> Apple Pay users can split purchases into four payments with zero interest and no fees

It seems like many of them act like credit cards and charge the merchant a percentage, since they “drive consumption” and encourage people to buy stuff. Of course, this fee will likely be added into the price that all consumers pay, so as these get bigger, we all will be subsidizing interest free loans to people in the form of 1%-3% higher prices. Much like credit cards are today.

The value proposition to me seems to be that they sold a bike at 3500$ they would not have sold otherwise and they can deal with the payment being made over time rather than all at purchase time.

For the user the value proposition is that value adding purchases like this can be made and paid off while they provide value.

It also allows the sellers to increase their prices or even simply upsell without pricing out their own consumer base.

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.

Is this a new version of "google it"?