- Apple may launch new monthly payment plans for products such as AirPods, Macs, and iPads, and accessories that’s available to Apple Card holders, Bloomberg reported Saturday.
- The new plans would come after Apple already debuted a 24-month interest-free payment option for Apple Card holders purchasing a new iPhone.
- The plan could be another way for Apple to boost its burgeoning wearables, home, and accessories division, which has been a bright spot in the company’s recent earnings reports.
- It also provides another clue at why Apple launched a credit card in the first place: to make it easier to buy new Apple products and harder to leave its ecosystem.
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Apple took its first major leap into financial services when it launched the Apple Card last year, positioning it as a more customer-friendly option thanks to perks like no fees and additional security-oriented features.
But by offering its own credit card, Apple also gains an important advantage: It incentives card holders to remain loyal to Apple and continue purchasing its products. Now, the company is expected to take that idea one step further with a new plan that lets you buy most of its products through monthly, interest-free installments when paying with the Apple Card, according to a Bloomberg report published Saturday.
Apple will reportedly begin offering interest-free plans that let customers pay off a product over the course of 12 months for iPads, Macs, the Apple Pencil, iPad keyboards, and the XDR Display. A similar six-month plan will be available for the AirPods, Apple TV, and HomePod, according to the report. Those who purchase an Apple product through the plan would have the monthly charge added directly to their Apple Card in the iPhone’s Wallet app.
The launch would come after Apple already introduced a 24-month interest-free payment option for iPhone shoppers purchasing through the Apple Card last year. The company also offers financing plans through the Barclaycard Financing Visa card, which lets you finance Apple products interest-free as long as you pay off the full balance within the promotional period.
Apple did not immediately respond to Business Insider’s request for comment regarding the new payment plan. But Apple CEO Tim Cook did say during the company’s fiscal second-quarter earnings call that it plans to bring the monthly instalment plan to additional products.
“We’re working on doing that for other products as well,”Cook said in response to an analyst question. “And you’ll see something on that shortly. So we’re very focused on the affordability point.”
It’s easy to imagine how such a plan could make purchasing Apple accessories like the Apple Pencil and AirPods more enticing. Instead of adding an extra $US130 to your iPad purchase to buy it with the second-generation Apple Pencil, thinking of it as an extra $US10 monthly expense on your Apple Card may seem more palatable for some. Similarly, instead of paying $US250 upfront for a new pair of AirPods Pro, you would be able to pay around $US42 per month over the course of six months on your Apple Card.
Making add-ons like the Apple Pencil and $US300 Magic Keyboard for the iPad Pro seem more affordable to shoppers could help Apple further boost its burgeoning wearables, home, and accessories division. That category, which also includes hit products like the Apple Watch and AirPods, has seen notable growth over the past several quarters as iPhone sales have stalled.
The launch would also come as paying in monthly instalment plans has become an increasingly prominent consumer spending trend. More than half of merchants surveyed by 451 Research in 2019 said they already offered instalment plans or planned to adopt them next year, according to The Wall Street Journal. The report also said that 40% of consumers surveyed said that they were more likely to complete a transaction if financing was available at checkout.
There’s even interest among debit card holders in using payment plans to buy everyday household items like groceries, according to research from Auriemma Insights. With payment plans becoming more popular for everyday purchases in addition to big-ticket items, it would make sense that Apple would add more flexibility to its own credit card to fit in with this trend.
Adding more accessible ways to purchase pricey Apple products could be particularly important now considering the United States has been in a recession fuelled by the coronavirus pandemic since February, the National Bureau of Economic Research said on Monday. Plus, US jobless claims have reached 42.6 million over the course of the last 11 weeks, according to the Bureau of Labour Statistics. That means more than 25% of American workers have lost their jobs in the past few months, limiting the spending power consumers could have on products like a new MacBook Pro or iPhone.
Apple has even reportedly discussed delaying its upcoming iPhone 12 release over concerns that the current economic climate could make it difficult for customers to buy it, according to Nikkei Asian Review.
What does seem clear, however, is that by making it easier to purchase new Apple products, the company is using its credit card as yet another way to convince users to remain loyal to its ecosystem. It may be partly why a technology company like Apple launched a credit card in the first place.
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