Apple Card Apple Card Installment Confusion

[Maclver]

Kind of confused on what the benefit is to doing monthly installments. From what I understand when you opt for installment you still have to have the available credit for the full price of the item. So if it takes up your available credit what is the point of the installment?

 

[Apple_Robert]

1) A lot of people can't afford to buy outright.
2) The credit card companies and retailerss love offering installments because it often hooks people into buying something they may not really need or worse, end up paying more (because of interest from failing to abide by the installment terms) for the item.
3) Can help gain new customers as well as long term customers who may end up buying more than that one installment item.

 

[glenthompson]

Some people need to spread the payments out and it encourages them to buy when they don’t have to include the interest. In other cases it’s a savings if you’re earning more on your savings/investments. As example, when we bought our Prius Prime, Toyota offered 0.9% financing. I could have paid outright but was earning a lot more on the money.

 

[Maclver]

1) A lot of people can't afford to buy outright.
2) The credit card companies and retailerss love offering installments because it often hooks people into buying something they may not really need or worse, end up paying more (because of interest from failing to abide by the installment terms) for the item.
3) Can help gain new customers as well as long term customers who may end up buying more than that one installment item.

But with the Apple Card it seems there is no difference besides interest if I opt to put the full price of the item on the card or if I opt to do monthly installments. From what I understand both options tie up the same amount of available credit.

 

[Apple_Robert]

But with the Apple Card it seems there is no difference besides interest if I opt to put the full price of the item on the card or if I opt to do monthly installments. From what I understand both options tie up the same amount of available credit.

That is true. The full amount of credit is tied up either way. The only upside is if you are offered interest free payments, already have the full price set aside in cash (should something unforeseen happen) and wish t take advantage of a free loan while putting your money to work for you.

 

[remington79]

Kind of confused on what the benefit is to doing monthly installments. From what I understand when you opt for installment you still have to have the available credit for the full price of the item. So if it takes up your available credit what is the point of the installment?

Instead of having to pay the full amount at once you can pay a portion at a time and without interest unlike if you used a different credit card. It’s nice if you need a new phone or whatever but can’t pay the full amount.

 

[baypharm]

Kind of confused on what the benefit is to doing monthly installments. From what I understand when you opt for installment you still have to have the available credit for the full price of the item. So if it takes up your available credit what is the point of the installment?

You are absolutely correct. There is only one point for installment payments: because you can’t afford to pay cash. The Apple card is not really useful from a points (cash back) perspective because it forces you to use either an Iphone or Ipad (Apple Pay) to use it for maximizing cash back. For example, if you use Apple Pay to order from Panera you’ll be rewarded with 3% back. Using the physical card most other places gets you a paltry 1%. Retail establishments that accept Apple Pay will get you in the middle: 2%. It’s just another way to thread you into the Apple ecosystem. Additionally, using the Apple card to buy an ipad restricts you to only 12 months free financing - whereas Best Buy offers 24 months free interest financing. Paradoxically, Apple card offers 24 months financing on iPhones. Go figure.

 

[SisterBlue22]

Another question about Apple Card installments - my understanding is that it puts the full cost of the item on your card, and if you pay that balance off in 12 months, you pay no interest. What if you don't pay off that balance in 12 months, for instance, pay monthly, but less than 1/12th of the cost of the item - does whatever remains then start accruing interest at the card's normal rate?

I've done these sorts of interest free promotions many times with other cards, but I can't find much on how it works specifically with the Apple Card.

 

[darngooddesign]

I've done these sorts of interest free promotions many times with other cards, but I can't find much on how it works specifically with the Apple Card.

Did you try contacting Apple?

 

[SisterBlue22]

Did you try contacting Apple?

Oh, wow, I hadn't thought of that. How helpful you are! <eye roll> Figured that a thread literally about the subject I was wondering about might have people who could quickly and easily answer my question based on their own experience.

In reality, I read all the "fine print" that Apple makes available regarding their 12 month installments, and the specific thing I was asking about wasn't clear, so I asked here.

For those who might be wondering, I went ahead and purchased my iMac this way, and although the full cost is deducted from your available credit, it seems that only the individual monthly installments are actually billed to the balance of the card each month. So there's at least part of the answer.