Pay Later? That's what I call it when I eat Taco Bell with Fireball Whiskey.
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'Apple Pay Later' Now Being Tested by Apple Store Employees Ahead of Launch
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You can imagine the notifications. "You have $500 in savings, just enough to buy the new iPhone SE 4..."
Apple will take it a step further:
"You have enough savings for that new iPhone. We went ahead and purchased it for you. We think you will love it!"
What repercussions do people face for non payment? I'm guessing a hit on credit scores plus collections as its backed by a proper bank? I wonder why they didn't even charge 1% interest, but I guess you get more sales if an iPhone purchase is divided by 4 payments.
As long as it is 0% interest, I always opt for the 'four payments over two months' option that companies like Afterpay offer. It is a no brainer for me. Frees up money for day trading! 😁
I never plan to use this feature. Enabling users to go into debt over instant gratification is never a good idea, even if it’s just 4 interest-free payments— it encourages bad spending behavior. This primarily targets those who simply cannot afford to pay for something up-front, and I don’t expect this feature to ever get used by anyone who’s smart with their money.
I was just thinking the same thing.
Maybe the first of the 4 payments starts when your normal credit card payment is due, so this gives you an additional 4-6 weeks to finish payments.
I agree for the most part.
I do however see scenarios where it could be useful to people who are fiscally responsible.
I know a few people in real estate who make good money but only close 4-6 properties a year. So every 3 months or so they get a check for 20k-30k. This could help people who aren't paid bi-weekly like a lot of people are but still make more than enough on an annual basis to cover their expenses.
I know these people probably would have a use for it, but think of CEOs who get paid $1 or a very low salary and the bulk of their income is in deferred compensation for tax purposes. They take an extremely low interest line of credit out against that future compensation. That interest is significantly better than the income tax burden they would pay plus the interest is usually tax deductible.
At least in the US, the ability for wealthy people to avoid tax burdens is mind boggling.
No one is forcing anyone to use a service like this. If people would learn about financial responsibility it would not be an issue.
I can afford to buy an iPhone outright but why do that when you get an interest free loan you can pay off over time? I just bought my mom an iPad. Put it on my Apple Card. Paying it off over 12 months and get 3% cash back on each monthly charge.
Well. All problems solved! We should let alcoholics and drug addicts know the same, so we can nip those in the bud too.
EXACTLY.
Thank you for posting this. It’s amazing how few people know how to use credit to their advantage.
No need for any of these payment plans if you have decent credit and don’t carry balances on your CCs.
So people who finance something with no interest means they can't afford it? That's basically what you're saying.
I would hazard a guess that most people don't know how to handle their CC correctly. Most use it as a store of debt, and get hammered with interest payments while ending up in a spiral of debt.
You are not their target market.
As for the original OP's question on what is the attraction of a six-week repayment program, well, that's simple.
- Valentine's Day is around the corner.
- Apple is pushing promos for Valentines
- You are a "typical" young consumer, and you want to impress your loved one with one of those promos, but you don't have the cash for it.
- Apple now offers a 6-week repayment program to "ease the burden", (when, let's face it, is just the start of the consumer's burden). However, it looks attractive. A $400 initial payment looks waaaaay better than $1200, and, "you'll be able to pay it off, no bother, in just 6 weeks. That is AGES away!".
- You buy the iPhone thinking you've nabbed a deal and it'll impress your loved one.
- The first payment date arrives, and you need to scramble to suddenly find that $400. You just about manage it, probably using a credit card to withdraw cash or using what little you have left in your account.
- Now we're onto the final date. You don't have enough cash, your credit card is maxed out, and you don't have enough to pay your bills and the phone. That lovely phone.
- You default on the payment, incurring penalty charges, or you use another credit card to pay off the debt, ending up in a debt paying debt cycle, and you end up on the road to perpetual financial misery.
Just because you don't think it'll happen to you, don't believe it won't happen to anyone else. It does, and these schemes are toxic, and very much designed to trap users into buying something they simply cannot afford.
Spreading a purchase over a period as pathetically short as six weeks sounds utterly pointless. It's going to be at best two credit card billing cycles. The only thing it will achieve is encourage irresponsible spending from finance-illiterate people, with barely any upside for the rest of us.
Shame on Apple for wasting time and resources on a product that is deliberately designed to abuse people while other parts of their business are languishing.
Tim Cook can't go away soon enough.
Shame on Apple for wasting time and resources on a product that is deliberately designed to abuse people while other parts of their business are languishing.
Tim Cook can't go away soon enough.
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I imagine the repercussions are massive. I'm keen to see the terms.
The thing is, not everyone is a day trader....
A very interesting topic. It brings to mind that in many or most or perhaps all countries, personal financial budgeting, the pros and cons of credit and the potentials dangers of spending more than one earns has not been a required course in high school. It boggles the mind that being able to recite an ancient poem or knowing the reasons for the actions of the main characters of a novel from the 1800's has been deemed to be more important than how to not go into huge debt and ruin ones future.
Before the literature fans attack me, I am fully supportive of poetry and Jane Austen but not at the exclusion of teaching an extremely important life skill which personal finance clearly is. I have yet to see an intelligent justification from governments and educational authorities as to why personal finance is not a mandatory subject in school. It may be now in some countries, but far too late.
Before the literature fans attack me, I am fully supportive of poetry and Jane Austen but not at the exclusion of teaching an extremely important life skill which personal finance clearly is. I have yet to see an intelligent justification from governments and educational authorities as to why personal finance is not a mandatory subject in school. It may be now in some countries, but far too late.
You paint a vivid tale and it’s a good illustration. Thank you. I’m certain your scenario will happen to people, just like how people get into trouble with credit cards every single day.
I know it won’t happen to me. I know how credit works. I also understand the real, present value of money in relation to what sacrifices I have to make to earn it, as well as the time value of money.
In some countries, medical bills and non-discretionary spending via credit cards sink more people than discretionary spending on electronic gadgets, whatever the mechanism may be.
You sound like a caring individual. Don't forget gambling addicts. It's not their fault they are living on a dream.