Apple Card expected to earn Apple $1B annually with minimal risk to Apple

The overall risk in using a credit card is almost entirely on the shoulders of the user, not the bank. If it were the reverse, then banks wouldn't offer them.

foregoneconclusion said:

The overall risk in using a credit card is almost entirely on the shoulders of the user, not the bank. If it were the reverse, then banks wouldn't offer them.

and Apple is 1-step removed from the bank so the risk is non-existent.

I said it in the other thread, but it bears repeating in this one.  This:
"More beneficial to Apple is that this is revenue with minimal risk or effort required on its part, aside from integrating the functionality. As Goldman Sachs is effectively paying Apple to access its customer base, and is handling all operations, managing credit exposure, collecting bills, and dealing with customers, this "should be almost pure profit to Apple," the analysts believe."

↑↑  That should scare the living tish out of anyone applying for one of these cards.  If the analyst is accurate, Apple gets paid a ton with little risk. Yaaaaaaay.  Yaaaaaaaay.  Our favorite company gets to make more money.  Yaaaaay (not really sure why, but Yaaaay anyway). You howerver, Mr or Ms Cardholder, you get to deal with Goldman Sachs, a company with a proven history of financial responsibility and regard for their customers well being.  ← tee hee.  Hopefully they're no longer the Goldman Sach we've come to know an love. ← tee hee.

Make good financial decisions people.  

foregoneconclusion said:

The overall risk in using a credit card is almost entirely on the shoulders of the user, not the bank. If it were the reverse, then banks wouldn't offer them.

You're forgetting about fraud and non-payment, resulting in referrals to collection agencies who buy the debt for pennies on the dollar.   Fraud is huge, although it should be less for an Apple-pay based card.    In fact, massive fraud and bad debt is what drives the ridiculously high interest rates and fees on credit card purchases (anywhere from 18% to 30%).   

Aside from an incident many years ago in which my credit chard was charged about $30 from a bar in Texas and was probably caused by a keying error in which they happened to get the check digit correct and a credit card stolen from my daughter's house (and for which the credit card company caught the fraud immediately and called me), I've never had any fraud over decades until recently.    Aside from having numerous credit cards automatically replaced due to massive data breaches and/or security flaws at the scanners in retail, two of my credit cards have had fraudulent purchases made recently, mostly in China.  These purchases were immediately caught by the credit card companies who contacted me as soon as the purchases were made, but I'm still puzzled how my credit card account numbers with the 3-digit number on the back became available to someone else.   I think CNP (Card not present) fraud is a threat to the entire credit card system.   

On a slightly related note, I get those crazy "I've hacked your account and have videos of you watching porn" ransom emails every day.   Some of them come with an old password of mine.   Notably, they're always passwords that I haven't used in years, so they must have come from old data breaches.   One password was used with a small publisher of music directories and I just figured that being such a small company, their website or database wasn't secure enough, but the others are more puzzling.   Since those are passwords that I no longer use, I don't know what sites I used them on because I don't keep a record of most old passwords.  

The big NYC retailer B&H is offering their own new credit card that refunds the amount of the sales tax.   But the interest rate is 30%, so someone would be a fool not to make sure they immediately pay off the entire amount before the first due date.   For them (or their bank) to break even on the card, the average person would have to hold a balance for about 4 months and I can't see that happening.   But for big purchases, like a Mac or a camera, one can save several hundred dollars and that's far more than the rebate that the Apple Card would provide.  But this B&H "Payboo" card is only good for purchases at B&H.

1STnTENDERBITS said:

I said it in the other thread, but it bears repeating in this one.  This:
"More beneficial to Apple is that this is revenue with minimal risk or effort required on its part, aside from integrating the functionality. As Goldman Sachs is effectively paying Apple to access its customer base, and is handling all operations, managing credit exposure, collecting bills, and dealing with customers, this "should be almost pure profit to Apple," the analysts believe."

↑↑  That should scare the living tish out of anyone applying for one of these cards.  If the analyst is accurate, Apple gets paid a ton with little risk. Yaaaaaaay.  Yaaaaaaaay.  Our favorite company gets to make more money.  Yaaaaay (not really sure why, but Yaaaay anyway). You howerver, Mr or Ms Cardholder, you get to deal with Goldman Sachs, a company with a proven history of financial responsibility and regard for their customers well being.  ← tee hee.  Hopefully they're no longer the Goldman Sach we've come to know an love. ← tee hee.

Make good financial decisions people.  

Wee sleekit timrous beastie

...afraid to play among the tigers, eh?