Apple Card. Is it free?

The simple answer is: No, it’s not.

Apple wants to make profit.
Mastercard wants to make profit.
Goldman Sachs wants to make profit.

Where do they come from?

As always from the customers. Retailers will calculate their costs and price them into the products they sell. Cash back? Yes, a shining example for eyewash.

An iPhone XS costs $999.
3% cash back would be $29.97.
Can anyone give me an argument why Apple shouldn’t consider this before they make their pricing definite?

This all is called MIXED CALCULATION and well known since decades but lots of customers still believe that some companies are charitable institutions.

An example for a mixed calculation:

Storage is cheaper than ever but iPhone customers don’t benefit. Despite the cost of NAND flash memory halving in price over the past year, Apple hasn’t reduced the cost of its iPhones accordingly. In fact, Apple charges the same 78 cents-per-gig (compared to 25 cents-per-gig costs) that it did in 2017, meaning that the iPhone is even more profitable.

Maybe 3% cash back is taken from the off the roof prices Apple charges for flash memories since years. So you paid a lot more before to get a reasonable price later.

But there’s also a much simpler way.

Increase the prices of an iPhone by $30 and the cash back for customers will be returned to the company.

A win-win business?

Yes, customers are happy to make big deals when purchasing overpriced Apple products and Apple is happy to get the cash back back.

What about using the card abroad?

Hey, wow, no transaction costs (but Mastercard determines the exchange rate). Do you already know what I mean?

You still like an  Card?

OK, then buy an iPhone. The fees for your card for 2-3 years are already included. You mustn’t pay them separately. So it’s the truth Apple is telling you. It’s free.

“It’s free” reminds me of Apple’s ad at the 2019 CES in Las Vegas. They wanted us to believe that “What happens on your iPhone, stays on your iPhone”.

Not kosher, Apple.

Take care.
Thanks for reading.
Don’t believe everything
a profitable company wants you to believe.