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Comment by ezfe | Hacker News Reader

I'm curious what the issue is, since most Apple Devices DO have interest free payments for 12 months

But you have to click the payments option (and pay the billed amounts). If you put the full balance on your card, you can't ignore it for 12 months and then pay.

So it's only no interest as long as you make payments on time. I guess this is technically misleading advertising?

It might also be that it only applied during specific circumstances (buying directly from Apple) instead of as a blanket offer. I've bought a few devices through this deal and personally am a happy customer, so I hope this doesn't kill it.

Isn't that every credit card? You pay your full balance on time it's essentially a delayed debit card because no interest is paid.

There's actually a term for this: charge card. Some American Express cards still work this way (i.e., you must always pay in full on time).

No. The financing Apple is offering is typically 12 months split into 12 separate payments. That is 0% financing and not a 'charge card' style. You're still getting 11 months of delayed payments, unlike a charge card where everything is due once a month from the previous month of the card.

Fair enough, I was just noting that "delayed debit card" has a proper name.

You don't have to pay the Apple card balance in full to pay no interest. You just have to make the payments on the agreed-upon schedule. You're effectively doing something like splitting a $1200 purchase into 12 $100 payments or whatever, rather than that plus interest. No credit card I'm aware of will do that for purchases in general, but presumably it's worth it for a card issued by the actual product vendor if it increases sales. They have enough cash on hand that it hurts them none to receive most of the payment in the future.

PayPal has an interest-free credit option, usually spread out over six months, as well. You don't always have to make a specific payment on the due date, but if you don't pay it off in six months then the whole amount of accrued interest is due.

No, it was a separate payment method called “Apple Card Monthly Installments.” If you just charged a purchase to your Apple Card, it was not an installment payment. That’s probably the confusion the regulators were complaining about.

I think this is it as well. I have a card, and do 0% payments. It’s not that bad, but I see how it could be confusing.

Right, which is why the program is called "Monthly Installments" not "no interest for 12 months"

IIRC, the installment each month hits your card like any other charge. So maybe if you let it become part of your revolving balance at that point, you'll pay interest.

It's been a while since I bought an Apple device that way, but I do think that's how it showed up. I always pay my card off each month so I never got to find out if the installment would be subject to interest if I didn't immediately pay it.

> So maybe if you let it become part of your revolving balance at that point, you'll pay interest.

Another interpretation is that the credit card balance is charged interest but the monthly payments, which are paid using the card, do not have interest applied. Which sounds accurate and not necessarily misleading, though there's an argument to be made given they market the card so heavily. I think the confusion stems from the situation of making monthly payments with a credit line that also expects monthly payments.

> making monthly payments with a credit line that also expects monthly payments

I agree, that is very likely where the confusion comes from. It would probably be better if they kept the billing separate even when it's on the same statement.

I hate to jump directly to assuming nefarious greedy corporation, but obscuring the monthly installment by paying it with the credit card does strike me as a deliberate choice. I guess CFPB agrees.

Right, it shows up as an installment plan when you checkout and each month a charge is put on your card to pay on the next statement cycle.

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