Photo (cc) by jkmallen
Want a fancy new Macbook but don’t have the cash for it right now? Don’t worry. Apple offers two ways to finance the purchase: PayPal Credit or Barclaycard Visa (with Apple Reward points!).
As you might imagine, I don’t think buying a computer on new credit is the greatest idea. If you are doing so, it’s almost certainly because you don’t have enough credit already available on existing credit cards. But there might be some exceptional circumstances where it makes sense. If you feel you must, pay careful attention to the details. I’m not a fan of the disclosures.
Apple devotees might be tempted by this card for two reasons. The card offers triple points on Apple purchases, which can add up to free Apple Store gift cards. And the card offers interest-free credit if the balance is paid off during the promotional period. But. …
Like all the old same-as-cash deals, there’s a big trap in the Apple offer. Interest does accumulate during the promotional period, and if you fail to pay off the balance in full, you’ll owe a big chunk of money.
So, for example, if you buy a $1,200 MacBook Air today, you get 18 months to pay that off. If you don’t pay every last cent by January 2017, you’ll owe a lot of interest to the Barclay folks. As an added trap door, there’s a second way all that interest kicks in — if you make any late payments during the entire 18 months.
How much interest? I can’t tell you. Maybe $50, maybe $500? Just a guess. In fact, it’s pretty darn hard to find out what the interest rate might be. Let me take you through the clickstream.
When you navigate to a laptop at Apple.com, you are presented with the full price and an “as low as” price hawking the financing options. In the example above, users are quoted “$1,199.00/ From only $57.57 for 24 months*.”
Click on the finance option, and you arrive at a page offering a PayPal Credit payment calculator or the Barclaycard option. If you are curious how much that costs or how the deal works, you might be inclined to click on “see terms and conditions for details. Learn more about financing with the Barclaycard Visa with Apple Rewards.” Once there, you see a frequently asked questions page on Barclays servers. Fourteen questions down — 14! — you’ll see “What is the annual percentage rate?”
You can’t see it, at least not there. Here’s the answer you get: “Please see the Terms and Conditions for Annual Percentage Rates available to new applicants.”
OK, so back a page. Armed with no information about potential financing costs, the would-be buyer’s only option is to click on “Apply Now.” After doing so, you’ll see a gleaming silver Apple Rewards card image, a big form to fill out and — after scrolling through all that — you’ll see “Legal Terms and Conditions.” And in that section, you’ll see a chart that finally says:
“Annual percentage rate for purchases: 13.99%, 19.99% or 26.99%, based on your credit worthiness. This APR will vary with the market based on the Prime Rate.” (There’s also a link to a pop-up with that information closer to the top of the page under the words “Learn about financing at Apple.” I missed it on first reading).
It might as well say “0-30 percent.” Not very helpful.
But, also perfectly legal, according to Chi Chi Wu, a lawyer at the National Consumer Law Center.