AppleCard routinely rejecting all Digital Nomads regardless of credit score?

TidBITS Talk
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I want to get an iPhone 12 Pro Max unlocked version on the Apple No Interest 24 month payment plan.

Apple used to use Citizens One, which is the bank that financed my iPhone 10s Max. But Apple has now switched to financing unlocked iPhones only with the Apple Card. (And Citizens One doesn’t report favorable credit experiences).

The three major cellular carriers will also finance through different banks, but the phones are either locked or tied to being a user of their services. I am delighted with Google Fi (except their miserable support from India) and have no desire to pay double or triple to T-Mobile or AT&T.

Over the last year and a half, I have applied three times for an Apple Card and have been rejected every time. I did have a charge off with Ford Motor Credit at the end of 2017. So I figured that was the reason. Meanwhile, my credit score has gone up to 760 which should be enough to get approved.

I am an American citizen, with an American residence address, American bank accounts, and an American Driver’s License. But I live outside the United States in South America for both political and financial reasons.

I was telling my friend who is also a U.S. citizen and a dual national about my Apple Card woes. He lives and works in Barcelona and is married to an EU citizen. But like me all his legal and financial activities are linked to U.S. addresses. He made his first million in Silicon Valley and has a credit score over 800. There is no way he presents a credit risk. But he cannot get an Apple Card either.

There is nothing about our foreign activities in our TransUnion credit files. No addresses and no creditors outside the U.S. He suspects that Goldman Sachs (the bank behind the Apple Card) is somehow looking at his stream of transactions, specifically swiped transactions, and seeing nothing but foreign transactions, and no U.S. transactions, has labeled him as a foreign resident and blackballed his application. Or perhaps they are detecting the use of a VPN when submitting the application and rejecting on that basis.

With COVID19, I haven’t been back to the U.S. to test this theory. But even the TOR network has all their exit points mapped to a database that is sold to companies to ID all communications emanating from that anonymizing method too. There cannot be any other reasonable reason why he keeps getting rejected. If it isn’t his credit, why and how are they rejecting him?

I only want the card for the 5% cash back on the iPhone and the interest free loan. I have no debts, pay everything in cash via debit card. (Although I am thinking I should start using my credit card a little and paying it all off every month.)

Question: Is there anyone on this board who is an American Digital Nomad in similar circumstances who has been able to get an Apple Card while living outside the United States?

(If you got the card before you left, you don’t meet the criteria for my research. Lucky you!)

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Banking is very tightly regulated. The only way you’ll get a definitive answer is to ask Goldman Sachs. From any other source it’s just speculation. (Also, bonus points for using “digital nomads” as if it’s a real criteria. Lol.)

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Thank you Gordon for trying to answer.

Have you ever been able to reach a giant corporation beyond the minimum wage staff in a call center? Your answer is akin to saying “Got a problem with Apple? Ask Tim Cook”. Tim doesn’t’ take my calls anymore. Steve could be reached 20 years ago via e-mail. Tim Cook lives in another universe.

Just a few digital nomads or ex-pats or Americans living outside the country that had perfect credit and were successful in applying and getting approved for the AppleCard would be enough to prove there is no hidden criteria at Goldman Sachs that uses detecting where the applicant is residing or spending their money at the moment, as long as they are a U.S. citizen and have an actual U.S. residence.

So far, at least in this forum of Apple users, such a person has not presented themselves. I’ll also try Reddit and Quora to see if any ex-pat has ever received an Apple Card.

Unfortunately, the one and only way to buy an unlocked iPhone at a discount, get AppleCare with Damage and Theft protection and pay for it over two years with an interest free loan is via the Apple Card and it must be ordered online and picked up in person at a U.S. Apple Store. Just walking in only works if you want to buy phone tied to one of the three U.S. carriers.

I might also try applying for the Apple Card using the Tor Browser in the event Goldman Sachs has purchased the database of known VPN servers of all the various VPN network providers and is simply looking at the IP of the application submitted. They do say they use the credit score from TransUnion and OTHER FACTORS in their approval process. The OTHER FACTORS are not disclosed.

And yes Gordon, Digital Nomads do exist. Probably millions of them. There are even a few countries these days that are welcoming Digital Nomads as permanent residents. They are good for the local economy.

According to what I’ve read there are over 16 million Americans permanently living outside the United States. I realize that 60% of Americans do not have and have never had a passport. To them, there is no other world beyond the borders of the United States. Digital Nomads are people who live for short periods of time (typically 90 days or less) in various countries on easy to obtain tourist visas to avoid the massive expense and ridiculous hassles of applying for and receiving a permanent resident visa.

You think you can just go live where ever you want in the world? How I wish we humans lived on a planet that provided that choice. Of course, if you are wealthy, Resident Visas are for sale, legally. Even United States Resident Visas and Green Cards. My friend sells them in Asia. He makes a hell of a commission on every Investors Visa he sells. He does presentations in fancy hotels to reach rich investors and explain the program.

It takes 1 million U.S. dollars invested in projects in certain Enterprise Zones in the U.S. to buy visas and green cards for the whole family. America isn’t as popular a place to invest and park money these days as it once was. Politics, you know? So selling his program is not as easy as it was when he started ten or more years ago. He lives in Ho Chi Minh City in Vietnam, speaks Vietnamese and Mandarin, married a beautiful much younger local woman and has a kid. He returns to the U.S. a couple of times a year. Nice life. He was an attorney playing the game of chasing partner in the U.S. before he escaped to a better life.

I’ve been an ex-pat twice in my life. 2 years living in Barcelona illegally, and now living legally in South America. Before the virus, shopping trips to Miami were easy and affordable. Not now. Too risky, too much hassle. Soon I hope. Waiting for my turn for the vaccine. No plans to ever live permanently in the U.S. again.

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That was a very long tangental reply, and I think you missed the word “definitive” in my response. You can gather all the anecdotal evidence you want, but given the financial regulations and corporate policies that are interacting, the only way to get an authoritative answer is to go to the source (Goldman Sachs). But far be it from me to interrupt your story-building. Have fun.

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I’ll keep it short for you: GOLDMAN SACHS WON’T TELL YOU. It is a trade secret or proprietary, so your suggestion is sadly worthless. So anecdotal information would be very valuable.

And there are no regulations about how banks make their credit granting decisions for unsecured loans (which is what credit cards are) unless you can prove they are making decisions based on race, religion, gender, sexual orientation, or other areas covered by the civil rights act. Other than that, they get to decide who is credit worthy and who isn’t. Their money, their risk, their rules.

If they deny an application, they must disclose the data they used to make their decision if it came from a credit reporting agency under the Fair Credit Reporting law. The credit score is only one criteria. Which they won’t disclose. They will disclose negative items they relied upon from the credit report, such as too much debt as a percentage of available credit, thin credit file, multiple inquiries on the file, history of paying late, charge-offs, etc.

They have stated in their marketing that they don’t issue the Apple Card internationally and they don’t have to tell you how they determine that the applicant is living outside the United States. Any more than they don’t have to tell you they are using technology to detect VPNs.

Mortgages are a different story and red-lining areas based on race is thankfully illegal, if you can prove it (which usually takes a whistle blower on the inside).

But far be it from me to interrupt your precision scientific analysis of banking behavior.

Have fun . . .

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OK, let’s keep it nice, everyone.

I’m certainly interested in hearing any ex-pat experiences that anyone may have, but only Goldman Sachs can say for sure why these rejections are happening. That’s not to say that they will share that information, just that anything else is speculation.

I will note that my son has been unable to get an Apple Card as well, likely because he’s a college student and doesn’t have much of a credit history. He’s been unable to figure out if there’s any way to meet the criteria as well.

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The real problem is the card is a necessity to buy Apple products at the best price and terms.

But Goldman Sachs doesn’t allow co-signers, so you cannot co-sign for your kid. Nor will they allow pre-paid cards, where the card holder deposits an amount of cash equal to the credit limit. Perfect for kids learning to manage money on their own.

I hear anecdotal stories and news articles about applicants with marginal credit getting approved, albeit at 22% APR for carrying a balance and being assigned low credit limits.

But I bought my 10s on Apple’s bank of choice, Citizens Bank, never late not once and Goldman Sachs does even know because Apple never insisted that Citizens One Bank report all credit experiences.

Ultimately GS will do whatever Tim Cook tells them to do, except Tim Cook has no clue how many sales he is losing due to GS wildly varying and secret credit granting algorithms.

Maybe Cook will sit for an interview with you ACE and you can ask him for all of us with curious minds. I have been using an iPhone since the 3s and I really don’t want to switch to Android.

But I hate being treated like a deadbeat by some gold plated Wall Street bank and an uncaring Apple CEO making $100 million a year and probably the only Apple employee who gets all his gear for free.

I could easily pay cash for whatever I want to buy at Apple but why should I have to do so when I am not a bad credit risk?

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I’m surprised that a few bucks of cash-back means that much to you, given how dim of a view you appear to take of Apple’s business practices. But let’s wind this down unless anyone else has something constructive to add.

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I found your message personally insulting, snide and a violation of your own TOS. Attack ideas, not people.

If $75 means so little to you, send a donation to an appropriate charity in my name and ask them to notify me of your contribution. St. Jude’s Hospital could use the $75.

If Apple Cash Back was so inconsequential, why does Apple make such a big deal over it and declares it as a strategic advantage in their marketing and a big reason to get their card? And gives more cash back for purchases of Apple products and services than for any other category? Apple clearly thinks it is a big deal. Why don’t you?

Plus it is the free use of someone else’s money for two years, having automatic payments withdrawn from my account and saving my cash for other purposes like travel, training or investments.

One great thing about capitalism is competition. The lack of competition in American Style Corporate Capitalism leads to monopolies and a lack of consumer choice. As in Facebook and Google. In this case, there is no other choice. By Apple’s intention.

I like Malcolm Forbes quote of “One who never asks either knows everything or nothing."

I agree. Let’s move on. I’ll seek my answers elsewhere.

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Just as a point of information:

Apple wants customers to think it’s a big deal, regardless of whether or not it is. It’s a big deal for them because they get the sales boost, plus who knows whatever other incentives GS may have added to the deal. Apple’s not on the hook for the credit—Goldman Sachs is—so Apple doesn’t really have a dog in the fight over who gets approved and who gets denied. They have no reason to push for looser approval standards. They get the marketing bennies and the “prestige” of branding a “premium” card all the same.

From Goldman Sach’s perspective, exclusivity is part of appeal of a premium card. The harder it is to get one, the more badly people will want one and the more they’ll pay to find a way to get it. GS is a high-end financial firm, and they don’t typically deal much in ordinary consumer credit. They’d rather have a small number of customers who they make thousands or millions off of than a large number of customers making them chump change. So they don’t have any incentive to make approval easier.

If neither the issuing bank nor the branding partner feels a need to make approval easy, then they’re going to take every easy and legal route for eliminating applicants. And locking out foreign residents, even expatriates who maintain US residency and finances, is an easy and legal way to do that.

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Yes, basically it is a business decision. One point that probably concerns Apple is that they are effectively giving a discount on Apple products to users of the card. This must be recovered by the card holder making other purchases and then GS sending a percentage to Apple. If Apple feels that that won’t happen with US non-residents then it isn’t in their interest for them to have a card.

This is all very simple. GS wants to get into the card business as they are a bank. Apple has lots of affluent customers that can be encouraged to use the card. So they do a deal. It is a deal that won’t make everyone happy.

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Apple makes it clear that cards are not available to non-residents. If someone tries to trick GS into believing that they are a resident and GS determines that they aren’t then they would probably consider that the application is fraudulent, and never issue any type of card to that person. Banks are like that.

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Not to disagree with what you say in general, but I do distinctly remember that one of the reasons mentioned why GS went into business with Apple for Apple Card was because GS was looking to expand into consumer financials where they previously had essentially nothing. Now Apple owners are probably on average more affluent than the general population, but $5000-limit credit cards to private individuals is still really small potatoes compared to what GS does otherwise. I would wager their understanding of “high end” or “premium” is rather different.

Also, I might add that at least in the US credit card companies earn most off of less affluent customers. Well educated upper middle class people that pay off their CC balance well in advance of their due date are not what drives revenue. Believe it or not, the real money comes from those poor schmucks who get routine visits from the repo man and are using their fourth CC to pay off the late fees on their third card. Liz Warren and her daughter wrote a quite interesting book on that a fews years ago in case anybody’s interested.

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Yes, I’m puzzled as to why this is confusing. As you (fogcity) noted, you’re not a resident of the United States. The card agreement specifically says it’s available to “qualifying applicants in the United States.” That’s why they’re turning you down.

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The Apple Card was a brilliant way for Goldman Sachs and Apple to stick their foot in the door for consumer credit, I suspect the another part of the appeal for Goldman Sachs and Apple is the number of retailers who commit to accepting the card. And there could also be opportunities to expand the financial services they offer, like checking accounts, mortgages. I’ve read about how the Apple has positioned the Card as being a financial health service as much as it is a credit card. A user can set up spending and savings goals, monitor rewards, etc., like they do with health and fitness services with Watch. And Apple’s commitment to privacy is also a big distinguishing feature in the field. So I agree that although the Apple Card is a consumer credit card, they are targeting a qualified segment of members. It’s not just about a large number of members.

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I am not a resident of any other country. I have a long term visa, but I am still a visitor. My legal residence is the United States, I file taxes from my US residence address. All my banking relationships are in the U.S. I have a U.S. phone number and my cellular and streaming providers are in the United States. My Amazon packages are delivered to my U.S. address. I vote in both state and federal elections in the U.S.

My application makes no mention of where I am visiting. Only my provided U.S. address matches the address in my TransUnion credit file. My postal mail is delivered to my U.S. address. My apps are downloaded from the U.S. Apple AppStore.

The Apple Card is valid for use all over the world. I am in fact, under the laws of the United States, a legal resident of the United States. I carry a U.S. passport and no other.

So there is no way from my application for the Apple Card that provides any indication that I am visiting other countries.

In fact when I came to Miami to buy an iPhone 10s at the Apple Store in 2019, Apple financed it. This was pre-Apple Card.

At that time my carrier was T-Mobile and if I wanted to go back to being their customer, I could finance the 12 through their banking arrangement, which has the same two year interest free term. But no Apple Cash back on the purchase.

And the phone would be locked to the carrier for two years. Sorry, I don’t do locked phones anymore and don’t want to be a T-Mobile or Verizon or AT&T customer. Very happy with GoogleFi on an unlocked iPhone. My phone bill was $27.60 last month. Try that on any other US carrier. Just the line charge alone is $40 a month.

The only way to finance an unlocked iPhone 12 on a 2 year interest free basis is via the Apple Card. There is no other option other than to buy it outright using an interest bearing credit card or to pay cash.

The cost to Apple of using a standard Visa or Mastercard or an American Express card is 2 to 3.5% in merchant processing fees.

That 5% Apple Cash back is mostly giving the customer a rebate of the invisible processing fee they pay as part of every credit or debit card transaction.

The merchant pays it but it is actually added to the price you pay. A merchant cannot explicitly charge a fee to use a bank card, but rest assured it is built into the advertised price. Which is why merchants will give a discount to customers paying in cash.

If in fact Goldman Sachs is invading my privacy by looking at my individual card transaction data they should be forced to disclose that fact. It is a pretty sophisticated trick if they have found a legal way to pull it off.

Fair Issac, the company that patented and uses secret algorithms to compute the credit score does not disclose their inputs to their scoring model. It would be unusual for GS to have built and use their own scoring model but not beyond the realm of possibility.

Did we learn anything from Edward Snowden about our own government harvesting our individual cell phone call data? Apparently we sheep don’t care.

All we see is the tip of the iceberg, the ease of buying stuff. You would be amazed at all the data collection and manipulation going on below the tip of the iceberg. But most people just don’t seem to care.

The convenience of using Google is apparently worth letting them know more about our behavior that we are even aware of. Google records every search you make and every website you visit using Google Chrome FOREVER!

Privacy is the next big issue to be debated after climate change. BTW, I do have an old negative item on my credit report and that is more likely the reason for the rejection despite a high credit score.

I may just be paranoid about what GS may or may not be doing just as I am paranoid about any organization spying on me without my knowledge. As the former CEO of Intel said “Only the paranoid survive.”

But anecdotally I have heard from people with no negative items that are rejected for an Apple Card and do not understand why.

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The requirement I quoted said “qualifying applicants in the United States.” No mention of legal residents. Apparently they care about where you actually live rather than where your legal residence is. And I can almost guarantee that you gave them permission in the fine print of the application to look for more information about than just what you put in yourself.

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I am not sure you actually understand how the credit card system works.

The merchant pays fees on every credit or debit card transaction. A small percentage goes to the authorization network: Visa and Mastercard. The rest goes to the issuing bank. This is in addition to any annual fees or interest collected from the card holder.

The Apple Card is underneath the marketing fluff a MasterCard. Apple in selecting GS as the issuing bank had their own set of requirements. Many banks submitted bids to be Apple’s issuing bank.

AppleCash is based on GS rebating the merchant processing fees back to the cardholder that paid them hidden in the price they paid for the product or service they purchased.

GS was willing to give that money back to get the high interest they charge on unpaid balances and get an opportunity to market their other products and services under the Apple brand. Using the power of Apple’s brand is worth billions to GS.

Brands are worth a fortune. Why would a company pay tens of millions annually to put their name on a stadium or building?

We know the peas in the Kirkland house brand can at Costco are often exactly the same as the peas in the more expensive Del Monte or Green Giant can, but our brains instinctively reach for the known and well advertised brand.

Apple and GS branding strategy may very well be based on making the AppleCard hard to get, giving it a cache of exclusivity.

Apple spends a fortune promoting their brands as the favorite of the smartest, hippest, coolest, most physically pleasing people in the world. Everything Apple does always has the brand message implicitly included. Right down to the typeface on the website.

We consumers are being well manipulated by brands. The best book on branding ever written is Positioning The Battle for your Mind by Trout and Reis. Another great book about marketing is Crossing the Chasm by Geoffrey Moore.

This stuff is both art and science. I find it fascinating. a company like Costco can sell products for less than a supermarket because all the profit is in the annual membership fee. Costco sells the customer purchase data back to the manufacturer. And puts their warehouses in low rent industrial areas. Pretty brilliant model.

The Apple Store model is successful. The Sony, Dell and Microsoft stores failed. What did Apple do right that these other companies didn’t?

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Costco does not sell or share information to third parties without member consent, and they do not sell data back to manufacturers, but they do use it to help manufacturers target product development. They do not sell manufacturers personal information about specific members:

https://www.costco.com/privacy-policy.html

Though the membership fee itself is an annually recurring source of income, the fee does not contribute as greatly to Costco’s annual bottom line as purchases from the stores do. Membership itself is an incentive to buy from a retailer that offers it, and managing and promoting memberships costs money.

Much like Apple, they relentlessly promote their own products, which are known for quality, though Costco is known for low prices. Both companies are known for being relatively good to their employees, as well as delivering growth for stockholders. And both companies have relatively small ad and promo budgets in their related fields, though Costco’s are microscopic and focused on sending mostly snail and some email promos to members, compared to Apple’s. And their stores are focused on personal, b to b, and family products. And both companies have mastered the art and science of supply chain management and relentless bargaining with their suppliers.

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Okay, at this point you’re just ranting.

I could address a number of problems with what you’ve said here, but I’m just going to focus on one.

Your words imply that you think no-interest financing is a right you are owed. It is not. Zero interest financing is a marketing tool used to bring people in the door. It is a privilege for those who meet the issuing bank’s requirements. If those requirements include being physically in the US, that’s perfectly legal and ethical. “Expatriate” and “digital nomad” are not protected classes.

It’s not been that long since you’d have gotten laughed out of the store for requesting no-interest financing on a high-end phone. Financial firms don’t want to give you money for free. They want you to pay for it, and interest is how the consumer pays for it. (Transaction fees are a big source of income also, but that’s money they make from the merchants, not directly from consumers. Transaction fees may or may not have a direct or quantifiable effect on the prices merchants charge you.)

Think of “zero interest” as a loss leader. They’re betting that if they can make you feel like you’re getting a better deal because of charging you no interest, you’re more likely to buy other things at the same time. It’s basic financial psychology, and it works more often than it doesn’t. Or at least, often enough to be worth doing it.

The Rolling Stones weren’t just making noise when they said, “You can’t always get what you want.” Sometimes, you simply can’t get exactly what you want on exactly the terms you want. There are ways to deal with that, but ranting about it is one of the least effective at actually getting what you want.

I think it’s time this thread wound down.

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