“As Apple Inc.’s investment bank, Goldman Sachs GS Group Inc. has raised tens of billions of dollars for the technology company,” Peter Rudegeair and Liz Hoffman report for The Wall Street Journal. “Now, Goldman wants to bank Apple’s customers, too — with a ticket size of a few hundred dollars at a time.”
“The Wall Street firm is in talks to offer financing to shoppers buying phones, watches and other gadgets from Apple, people familiar with the matter said,” Rudegeair and Hoffman report. “Customers purchasing a $1,000 iPhone X could take out a loan from Goldman instead of charging it to credit cards that often carry high interest rates.”
“The partnership would be a coup for Goldman as it tries to grow its new consumer bank. Better known as an elite adviser to corporations and governments, Goldman is embracing retail banking and plain-vanilla lending in pursuit of growth as some traditional areas of strengths, namely trading, slump,” Rudegeair and Hoffman report. “In 2016 Goldman launched Marcus, an online lender that helps people refinance credit-card debt. The firm is now building a ‘point-of-sale’ financing business that will offer loans to shoppers at checkout, according to people familiar with the firm — effectively finding those customers one step earlier.”
Read more in the full article here.
MacDailyNews Take: Whatever helps minimize the sticker shock some see on a miracle pocket computer as powerful as a laptop starting at just $999 is a Good Thing™ for Apple, provided the interest rates aren’t predatory.
I put my full price iPhone 8 Plus on a credit card… and then paid it off the next month. Anybody who can’t afford to do the same has no business buying an iPhone X. But here comes Goldman Sachs licking their fangs.
https://www.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405
That’s usually how I buy my Macs. I save up for awhile to reach the full cost and then I pull the trigger on my credit card. I always buy my Macs online and that’s the best way for me to do it. I like to pay-off on anything I buy by the following month because that way I can keep my FICO rating very high.
For me, a credit card is just a temporary substitute for cash and not to used as a medium- or long-term loan. Plus, a credit card is always handy for some unforeseen emergency. I only spend what I actually have in the bank for that specific purpose. That’s why I can’t understand Wall Street and doing things like buying stocks on margin or investing in companies burning through cash. I’m old-fashioned and don’t like to take obvious risks. Imagine consumers buying Bitcoin by credit card. That’s just crazy.
I know not everyone can pay their credit cards back every month and they still need to have the best for various reasons. Most people probably have to stretch out their credit card payments but I’m not entirely comfortable doing that.
Apple and Goldman’s deal is good for those two companies but not so good for consumers who think they have to have everything they set their eyes on. It’s better for a consumer to buy a cheap Android smartphone than an iPhone they can barely afford. I say this as an Apple shareholder who shouldn’t care as long as iPhone sales go up, but easy credit allows consumers spend more than they can necessarily afford. I’m just giving a personal opinion of how I think and I’m not saying it’s some hard and fast rule for everyone to live by.
it would appear, by virtue of sharing similar financial values, that we are but anachronisms in our own time.
american consumers have, over the past several decades, been hornswoggled into thinking that debt is a good thing, or at least a convenient thing, so we can obtain the things “that you deserve”, as the banks like to encourage us.
but it is convenient only for banks, as they and their minions have gotten states to eliminate usury laws so rather than paying perhaps 4% on the unpaid balance they can rake in as much as 20%.
word of advice, if you can’t afford to pay cash for it, don’t buy it.
As someone who didn’t get free from credit card balances until my fourties, I totally concur with using credit cards to to make a purchase, get the benefits / rewards, and pay the card off before any interest occurs. Divorce, child support, and poor financial education at a young age contributed to a long path with credit card balances. Now it feels good to not be a hostage to that kind of debt. In my case I also feel less impulsive when making a purchase knowing that I will be paying the full bill right away; it’s more visceral. I can’t change the past but I wish my parents and public school education would have done a better job with conveying personal financial responsibility and what it entails. All I can remember from that time is “Take on me… Take me on…”
i have long thought that high schools need to put a greater emphasis upon teaching civics, money management and a course in how to critically assess both advertising pitches and media coverage.
Critial Thinking! Who’d Have Thunk It?
The financial system is preying upon the poor. They extend credit until they miss a payment – any payment, even if it is on an unrelated bill. Then they immediately jack up the interest rate to usury levels – I saw someone recently get slapped with a 29.7% rate on their credit card balance for paying a utility bill late.
That is utterly frigging ridiculous, imo. There is no possible way for most people to dig out from that double whammy. Meanwhile, banks are paying <1% on your deposits and even long term government paper is yielding <4%. The interest rate spread is unimaginably criminal.
I financed my iphone x through verizon at $40 per month at ZERO percent interest. I then took the the money I was going to use to pay cash for the Iphone X and invested it in stocks. Now while you guys have a paid off phone I have $1000 stocks for the long run and was able to benefit from the last quarters dividends and cap gains.
With Apple’s program, you get interest free credit for the full 2 years and you are part of the upgrade program. Best option for me.
I agree. Apple already has a great plan in place for installment payments and plenty of cash to back it. Why would Apple let Goldman Sachs jump in with some kind of favored status to shear the consumer sheep a little shorter? What would consumers gain from funneling profits to GS?
Apple had better continuing putting its customers first! That is the main basis for my long term loyalty to the company and its products. I can easily get reamed elsewhere for less money!
Someday all this debt will explode again. Why even work? Just borrow and get your stuff. Apple and Goldman don’t care, they will get their money anyway. Goldman will package it as some CDO or other Wall Street invention.
With all of Apples cash stock pile why would they need anyone to do any financing, they should just do it themselves, another stream of revenue for them
Good advice les. Apple must be naive or plainly idiot to team up with GS.
Don’t do it Apple, there is no need. Goldman Sachs isn’t helping your share price on WS why help them.