Apple recently rolled out its new Pay Later system, a new type of credit system that has quickly become popular. The system allows users to purchase iPhones, iPads, and other Apple products without any upfront payments, instead paying a fixed cost over monthly installments. On paper, the new system seems like a great way for consumers to get their desired products for a lower cost. However, a closer look into the system reveals the ugly economics behind it.
When a customer opts to pay for an Apple product through the Pay Later system, they are essentially taking on a loan from the company. The interest rate applicable to them is 8.99% which, while lower than the average credit card’s APR, is still relatively high. This means that, in the long run, customers are likely to pay more for their product than if they had simply chosen to purchase it outright. Moreover, Apple does not offer customers any incentives or rewards if they opt to use the Pay Later system. This means that customers may find themselves playing right into Apple’s hands, as they are in effect paying more to the company without any tangible benefit.
Another issue with Apple’s Pay Later system is that it’s only available to those customers who are able to pass Apple’s stringent credit requirements. This means that those with a lower credit score or lower income may not be able to take advantage of the system and may be forced to opt for another payment option. This severely limits the accessibility of the system, and customers may end up paying more than they need to because of this restriction.
All in all, while Apple’s new Pay Later system is a great way for some consumers to purchase their desired products, it is important to understand the economics behind the system and to become aware of the risks associated with it. Customers should carefully assess their financial situations and only opt for the Pay Later system if they are sure they will be able to pay back the loan without putting themselves in a precarious financial situation.