Apple Pay Later Financing Feature Continues Rolling Out to iPhone Users

[sstreky]

The only people I see using this is people who already have bad credit, because otherwise they would've just signed up for a credit card that actually rewards you. This will just push those people deeper in debt.

Edit: I see they do a credit check for this too. I imagine it would be as stringent as the check for Apple Card though.

If you can't afford something now, just don't buy it! It does not make sense to spend money you have not even earned yet.

Only you can initiate a hard pull credit inquiry which happens whenever you apply for a loan or new credit. It goes on your record so that everybody giving you credit now can see that you are now applying for more credit through somebody else. And it definitely impacts your FICO score.

What’s happening here is Apple is making an informal inquiry onto the credit worthiness of an individual which is counted as a soft pull check. The good news is that these don’t impact your score, and it’s basically the same type of an inquiry that an employer would make on a prospective employee in the form of a background check or a landlord would use to assess a prospective tenant.

What might surprise most people to learn is that this can be done without your permission. Apple is doing just that they are assessing the credit worthiness of its iPhone users without even asking them and then sending them an invite.

By the way, if anybody finds this totally privacy invasive, good news is you can now block these companies from having access to your credit this way. However, it’s not the default setting with the credit bureaus. They are free to allow it until you contact them and request that they stop.

 

[chrono1081]

Not sure how I feel about this with others like Klarna, Affirm and the like. It's a great feature but some of the stuff I have read about what's being financed (groceries) is not good. Features like this should be used sparingly and should not be relied on regularly. Just like credit cards, treat this with respect and not like free money. Otherwise you can find yourself in hot water.

It's helpful to split a large purchase over time as long as you budget for it and have the money.

This.

I feel like things like this should be used for surprise purchases that you may need right away. I can see myself using this for something like plane tickets where I don't want to lose the entire cost of the ticket in one fell swoop and can just pay it off over a few weeks.

 

[_Spinn_]

I still don’t see it, but I’m also not interested in this feature.

 

[AbSoluTc]

Here’s a story from Bloomberg about how these buy-now-pay-later services are being used by many people, for anybody interested (while taking loans to pay for basic living expenses is never good, at least BNPL can be less exploitative than payday lenders):

“US consumers are increasingly using such installment loans to pay for everyday items like groceries, highlighting the financial pain wrought by the worst inflation outbreak in four decades. Grocery prices jumped 8.4% in the year through March, according to the Bureau of Labor Statistics. Almost half of Americans have used BNPL apps, and of those, about 1 in 5 rely on such apps to buy groceries, according to a recent survey from LendingTree Inc. Some 27% of users use the loans as a bridge to their next paycheck.

The BNPL business surged during the pandemic—five of the main lenders in the US originated loans worth $24.2 billion in 2021, up from $2 billion in 2019, according to the Consumer Financial Protection Bureau (CFPB). The model typically allows buyers to spread payments out evenly without accruing interest, making it an attractive alternative to credit cards, with US interest rates at their highest level since 2007. More players are getting in, with Apple Inc. introducing Apple Pay Later last month. “

Americans Go Deeper Into Debt as They Use Buy Now, Pay Later Apps for Groceries

With inflation squeezing budgets, more consumers are turning to instant credit apps to make ends meet.

www.bloomberg.com

Read all those previously. It's not good, especially when people don't have money to begin with. Even if it's a better alternative to payday loans.

 

[Tokenfreak]

So the loan money is stuck on Apple Pay Later Card? It can't actually be sent to like our saving account and then withdrawn to actual cash and pay for something that way for places that don't accept Apple Pay?

 

[compwiz1202]

This.

I feel like things like this should be used for surprise purchases that you may need right away. I can see myself using this for something like plane tickets where I don't want to lose the entire cost of the ticket in one fell swoop and can just pay it off over a few weeks.

Or if a flash sale shows up but you don't quite have the money yet. Did the same thing with layaway back in the day. If you put it on layaway it locked in the current price.

 

[vikingjunior]

I gotta wonder if this is mostly for people who got denied an Apple Card.