
Apple Missed Its Chance to Fix Credit Cards - allenleein
https://onezero.medium.com/the-apple-card-a-missed-opportunity-e286f9970b97
======
vermilingua
This reads like fiction. Apple is not becoming a financial company, they are
running the card in conjunction with Goldman Sachs; something scarcely
mentioned in an article pretending to be a deep-dive. It is not in the
interest of GS to shake up the credit card industry, and therefore not in
Apple’s interest either.

~~~
neilalexander
If anything, all Apple have done in effect is build a nice shiny internet
banking UI on top of a normal credit card.

~~~
votepaunchy
Just like the iTunes-phone collaboration with Motorola in 2005.

[https://www.apple.com/newsroom/2005/09/07Apple-Motorola-
Cing...](https://www.apple.com/newsroom/2005/09/07Apple-Motorola-Cingular-
Launch-Worlds-First-Mobile-Phone-with-iTunes/)

------
dangus
As far as the article’s expectations of Apple, they’re unreasonable to begin
with. Apple isn’t even the “everyone” consumer electronics company with many
products completely out of reach of people with average incomes.

Why would anyone expect someone like Apple to upend the credit system? The
Apple Card is a slightly better than usual store credit card, as most grounded
analysts would have predicted.

I fault the author of the article for taking marketing copy so seriously.

As far as the “broken” credit system, the author of the article manages to
miss the point entirely:

> Credit cards are a regressive sales tax on society, fueled by financial
> illiteracy. Apple had the opportunity to wipe this practice out, offering
> the same perks—2% cash back, a fancy metal card—to the many millions of
> financially impoverished people in the United States.

It doesn’t make sense to ask for “cash back for everyone!” The whole idea of
cash back is flawed in the first place. It literally comes out of the
merchant’s pocket in the form of transaction fees.

Fixing the credit system in the United States would mean capping card
transaction fees at a more reasonable rate. The whole idea of a rewards card
would go away entirely.

As far as the credit system being inequitable, well, of course it is. Nobody
has a solution to that, until we’ve reached a point where literally everyone
is able to pay back their debts.

In my eyes there’s nothing wrong with credit scoring itself, the inequities
start when people use it for things like hiring decisions (I’m shocked that’s
not banned).

------
exabrial
The only thing Apple is selling is their brand with the iCard. Hilariously
they say it's not from a bank, but it's not only issued by a bank, but runs
through a traditional credit card provider.

Breaking the stranglehold of Visa/MasterCard would be innovative. I personally
think they should put their economic weight behind something like stellar so
the 'unbankable' of the world has a chance to leave poverty.

~~~
Terretta
> _not only issued by a bank, but runs through a traditional credit card
> provider_

Goldman Sachs is not a standard consumer bank, and this is their first credit
card.

[https://www.cnbc.com/video/2019/05/28/apple-card-first-
credi...](https://www.cnbc.com/video/2019/05/28/apple-card-first-credit-card-
for-goldman-sachs.html)

They’ve made some other unusual choices too:

[https://www.marketwatch.com/story/apple-and-goldman-sachs-
ar...](https://www.marketwatch.com/story/apple-and-goldman-sachs-arent-
reporting-apple-card-information-to-credit-bureaus-2019-10-15)

------
johneth
> "We use ML and Apple Maps to accurately tag your purchases with real store
> names and categories"

Monzo does this for transactions in the UK (and has done since they launched a
few years ago, IIRC) - it's not novel. I think other banks are starting to do
this too.

~~~
dangus
I think Capital One does this in the United States, and the whole Machine
Learning and Maps magic that’s associated with it is entirely unnecessary.

The credit card companies already have the address of the merchant. They just
stick that address on the map.

------
mschuster91
Regarding CC rewards: how on earth do these 4-5% cashbacks work for US CC
holders in Europe? Here, the CC fees are capped at 0.3%, so who is paying the
difference if neither the merchant nor the customer pays?

~~~
argonaut
Many of the cards you see offering 4-5% cashback on certain categories either
have 1) high annual fees, or 2) a foreign transaction fee (the the US credit
card holder gets charged a fee whenever they use the card abroad, such as in
Europe).

------
tener
TLDR: Apple card is more of the same, and they didn't fix the author's pet
peeve (US credit card/score system is broken and discriminates people).

------
fwxwi
Weakest article ever. One of his main arguments is that a Taco Bell
transaction got miscategorised, lol

------
lame-robot-hoax
There was a good post on r/personalfinance recently about the Apple Card’s
mediocrity.

[https://reddit.com/r/personalfinance/comments/dwmbzn/ive_own...](https://reddit.com/r/personalfinance/comments/dwmbzn/ive_owned_the_apple_card_for_3_months_this_is_why/)

~~~
sambe
The post incorrectly claims you must pay by mail or phone. It also doesn't
mention the security aspect of changing card numbers.

Whilst 1-3% cashback is may not be unusual in the US, ~0.2% is typical in the
UK (maybe ~1% with Amex). Some countries have hardly even heard of cashback
cards, I think. Looking e.g. here:

[https://thepointsguy.com/guide/best-cash-back-
cards/](https://thepointsguy.com/guide/best-cash-back-cards/)

suggests that the US market is also not as generous as commentors make out.
Most high-cashback cards are quite specialised, often even changing month-to-
month. There is only really one exception at 2% on all purchases.

