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Stay Hungry. Stay Foolish.

A blog by Leon Oudejans

Apple Card, a credit card revolution

29 March 2019

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On March 25, I watched Apple‘s almost 2 hour online presentation of its new services rather than new products. I was most impressed by Apple Card and least impressed by Apple TV+. Most media attention was however about Apple’s competition with Netflix. Only some media focussed on Apple’s entry in the financial services industry.

For a detailed discussion on the Apple Card, I refer to Brian Roemelle‘s recent article on Quora. A hat tip to Chris Skinner for mentioning it in his recent blog. I recommend reading Brian’s article when you are interested in Apple, banking, Big Tech, business models, financial services, industry predictions, and/or technology.

I was very impressed by Apple Card, which is likely to revolutionize the American payment industry. Contrary to Europe, credit cards are very important in the US because they provide credit facilities. It’s not uncommon having multiple credit cards and thus multiple credit facilities in USA. Credit card debt is, however, also a (very) big problem in the US:

CNBC-2018: “The average American has a credit card balance of $6,375, up nearly 3 percent from last year, according to Experian’s annual study on the state of credit and debt in America. Total credit card debt has reached its highest point ever, surpassing $1 trillion in 2017, according to a separate report by the Federal Reserve.”

The above shows the immense size of the financial services market that Apple is entering. Apple is offering many “goodies” like: low(er) interest rates, no annual fees, no cash‑advance fees, no international fees, no over‑the‑limit or returned‑payment fees, no hidden fees, no surprises, and most of all, no charge for penalty rates if you miss a payment deadline.

In European countries, the Apple Card is less important because payments are typically processed through debit cards – or cash (eg, Germany). In some European countries, cash payments have become so rare that Central banks have become worried (eg, Sweden, Netherlands, Politico-2018, ECB-2017). The same issue applies to Canada (eg, Cash Matters).

Apple Card will most likely be an American phenomenon but obtaining “the laser engraved, titanium Apple Card” might still be (very) important for every Apple fan.

“I’ve always been attracted to the more revolutionary changes. I don’t know why. Because they’re harder. They’re much more stressful emotionally. And you usually go through a period where everybody tells you that you’ve completely failed.” A quote by Steve Jobs (1955-2011).

The Big Apple (1972) by Hugh Masekela (1939-2018)

artist, no lyrics, video, Wiki-1, Wiki-2

Note: all markings (bolditalicunderlining) by LO unless stated otherwise

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