eightzero

grandact73 said:

Objectively, the benefits of the Apple Card are extremely mediocre. There are lots of other cards that give, for example, much high cash back on other categories, up to 5%+.

mpantone said:

dewme said:

mpantone said:

dewme said:

What happened with Apple’s relationship with Barclays?  I seem to remember using Barclays relationship with Apple to get interest free financing to purchase a couple of my earlier Macs and possibly iPads. 

Perhaps partnering with a non-US based bank may make it easier to roll out support for Apple Card more globally. 

Ultimately, shouldn’t we expect that Apple Card would be supported by multiple partners, similar to Mastercard and Visa?

You have made a common error by someone not familiar with the basics of the consumer credit card industry.

Mastercard and Visa aren't credit cards: they are payment networks. American Express is both a credit card company and a payment network.

Technically, the Apple Card is a Mastercard issued by Goldman Sachs USA, NA. It says so in the fine print of the service agreement that any Apple Cardholder accepted (by clicking "Accept"). In that way, it's similar to a VentureOne Mastercard issued by CapitalOne.

Barclays Bank would be the issuing bank. It's almost certain that Apple had discussions with Barclays Bank about the Apple Card (before it debuted) before Apple selected Goldman Sachs as a partner.

Apple would have to partner with banks from other countries to service customers in those areas. But those banks have to have a business in the country and follow the banking regulations of that country as well. It's not like an random American can apply for a JCB card (a Japanese card) or a UK card.

To have American cardholders, Apple needs to find a bank located in the USA (which would be subject to US consumer banking laws, not those of the UK, Japan, Nigeria, wherever.

Excellent insight and enlightenment. Thank you, You are correct, my exposure to credit card payment systems is solely as an end user. Barclays previous relationship with Apple lasted several years and was a benefit to me on a few occasions. That is why I was surprised when they were not part of the Apple Card deal.

Despite being a newbie when it comes to the credit card industry, I actually use credit cards extensively as a means to avoid carrying excessive cash. I never use debit cards. My go-to card has long been Discover because they have always had exceptional customer service when I’ve had to deal with them. But when I travel outside of the US, they have not been well supported so I have to carry either a Visa or Mastercard too. Perhaps I’d be better served with an Apple Card with it being a Mastercard and having some Apple related benefits. 

The only other exposure I’ve had with credit cards is company issued credit cards. Things may have changed over time, but I recall that unlike Visa/Mastercard, American Express was often a struggle to use outside of the US, at least for some expenses. I’m curious whether the Apple Card is widely used for company issued credit cards? Speaking of Japan, at least in the late ‘90s, business travel there was a struggle with any credit card, regardless of the issuer or sovereignty of the issuer. Everything was cash-only, even hotels. Hopefully that’s improved.

For you and others who don't know how credit cards work, here's a basic explanation. When you visit a Merchant X and decide to pay with Credit Card A, they will swipe your card. Through a payment network (Visa, MC, AMEX, Discover, JCB, etc.) they will contact the card issuing bank. Customer wants to pay, authorize charge? If the payment is authorized, Credit Card issuing bank A pays the merchant (or technically the merchant's bank). Now Credit Card issuing bank A has paid for your purchase with their cash. From the service agreement, you are responsible for paying that debt back to Issuing Bank A. That's the agreement you signed with Issuing Bank A, the fine print you have never bothered to read. You don't owe Merchant X anything more, they got paid by Issuing Bank A. You OWE Credit Card Issuing Bank A, that's why you get a statement from them. To Bank A there's a liability associated with you as a creditor. That's why there are interest charges, late fees, etc.

And your credit score is partly related to that debt. Remember that a credit score is a numerical figure that represents the likeliness that you will pay your debts. 

My credit score is around 825-830. That means that I have an extremely high chance that I will pay off my debts. Guess what? I haven't paid any credit card fees or interest in probably 25 years. I'm what the consumer credit industry calls a "deadbeat" -- someone who pays off their entire balance due immediately, generating no additional revenue.

Forget to make the required minimum payment? Credit card issuing bank will tell a credit reporting agency, "Hey, this guy is a slacker. He missed a payment" (it's called a derogatory). Credit agency sees this as recalculates a lower score: you are less likely to pay off your debts based on payment history.

When you use a debit card, the merchant's bank uses the payment network (Visa, Mastercard) to contact your personal bank. That's why a debit charge will hit your checking account immediately. Your bank looked at the authorization request and said, "Yes, our client has the funds for this transaction." This is why debit card transactions don't affect credit cards. There's nothing owed. You buy something and if the charge is authorized, you have less cash. There's no debt, you have fewer funds.

The Apple Card is a decent card to consider for international travel because it incurs no foreign transaction fees. Of course, there are other cards that predate the Apple Card that offer the same benefit. The Visa card issued by my credit union is one. There's also a MC card issued by CapitolOne that also waives foreign transaction fees. Some (but not all) of the American Express cards offer this benefit.

Things have changed. More of the world accepts credit cards including American Express (which was hard to use in the late 20th century). Also, policies for company related travel have changed. Compared to 20 years ago, it's far more common for companies to not issue company cards to employees. Employees who do travel for the company use their own credit cards and fill out expense reports to be reimbursed. There are modern ways to do this with apps and services (like Concur) to automate the expense reporting workflow.

As for Japan, yes, they accept credit cards more these days. All travel can be done with credit cards. They have also gone nuts for touchless payment. Initially it was JR's Suica card (an NFC touchless transit pass) that started the trend. More and more vendors started adding the Suica card as a payment option. Then it went crazy. This happened around 2005 with the invention of the pre-smartphone "osaifu keitai" (literally "wallet phone"). Now people could use their phones as transit passes, movie & event tickets, payment for convenience stores, etc. Eventually other transit agencies and companies launched payment cards (Tokyo Metro has their well accepted Pasmo card).

These days traveling in Japan, I can pay for most things with my phone using the Suica express transit pass or via a credit card linked to Apple Pay. You can even ride Kyoto buses with a Tokyo Metro Pasmo card. The USA is maybe ten years behind Japan in NFC contactless payment integration, especially when it comes to transit.

It's amazing how little many people know about the consumer credit world despite the fact that most daily transactions by Joe Consumer in the USA are transacted on credit cards. And yes, it's worth learning the basics. Consumer credit scores aren't just used for setting mortgage eligibility anymore. They are now used in an ever increasingly wide variety of applications. In the long run, having a higher credit score will save you money in interest payments for things like mortgages and vehicle loans even if you pay off your credit cards every month. Who wouldn't want to knock off $100 of their monthly mortgage payment? Over a thirty-year mortgage, that would be $36,000 in savings.