Apple has been slowly building a position for itself as a financial services giant, banked around its digital wallet for storing a user's payment cards and the launch of its own Apple Card in 2019. Today during Apple's spring event, the company announced the newest chapter in that story: the launch of Apple Card Family, which will let partners/spouses build joint credit and give family members over 13-years-old access to using Apple Card, too.
Apple Card Family will launch first in the U.S. in May after users update to the latest version of iOS, Apple said today.
The timing of the announcement is interesting. Last month, Apple and partner Goldman Sachs were cleared of any gender bias in how they build credit scoring in the Apple Card, a long simmering investigation that had been going for nearly as long as the Apple Card itself.
At the time of the ruling, even as Apple was cleared, the regulator noted that what the case did highlight was the more endemic gender and other disparities in the credit scoring system, particularly as they pertain to spouses and partners.
In light of that, some might say the announcement today is not coming as a surprise, and others might say it is long overdue.
This service announcement feels like it's the company's effort to seal the deal and draw a line under that story, and more formally lay out its intentions to be equitable even if regulations have yet to catch up.
"One of the things that became apparent to us in the beginning [of launching Apple Card] was a lack of fairness in the way the industry calculated credit scores when there were two holders of a credit card," said CEO Tim Cook today. "One of you got the benefit of building a good credit history, and the other did not. We want to reinvent the way this works."
(It's also not a surprise on another level: developer previews of iOS 14.5 revealed that Apple was building in multiuser support for Apple Cards, laying the groundwork for joint accounts for adults and wider family usage.)
As Cook described it, spouses and partners will be allowed to share and merge their credit lines have equal rights on their account, in order to "build credit equally."
"This solution helps deliver financial equity, and it's a game-changer," he said. Indeed, in cases where either one partner has outstanding debts, or has defaulted on some of that debt, or doesn't have the same earning power, this move is a way to confer the stronger spending power of one partner on another, in cases where partners are actually combining their finances anyway. It makes sense and frankly is long overdue.
The ability to give Apple Card access to over-13s, meanwhile, will come with spending limits if you want to put them in, along with other controls in terms of how it can be used.
This is also smart, an extension of how Apple has built a role for itself as the "responsible" technology company with privacy controls for all users, and parental controls for devices, and now it's adding on a new angle, becoming an educative tool.
Many parents are turning to technology and apps to build more financial nous among their children, and so it makes sense for Apple to position itself as a partner in this effort.
While letting families run their finances in a more equitable way, there is of course another, more business-minded strategy here: It's clearly giving Apple a much, much bigger pool of potential consumers using its Apple Card, using services like Daily Cash (which gives up to 3% of every purchase as cash on users’ Apple Cash card each day) and access to using the secure titanium Apple Card that comes without a visible card number, CVV security code, expiration date or signature.
On that subject, we don't quite know how many people are using that Apple Card today. Cook simply called Apple Card, which was estimated to be used by over 3.1 million people as of March 2020, "the most successful credit card launch ever."
(Update) A few more details on how this new program works:
Apple Card owners can add up to five people to their Apple Card account. All the users have to be part of the same Family Sharing group in order to be invited to Apple Card Family, and they all have to be 13 years of age or older.
When existing Apple Card owners merge their accounts, they share a combined credit line that's the total of their two individual credit lines. For example, if one spouse had a credit line of $5K and the other had a line of $10K, the new credit line is $15K. They'll also receive the lower of the two APRs.
All account activity, good or bad, gets reported to credit bureaus for the Apple Card's co-owners.
Kids added to the Apple Card Family program are considered "participants," not co-owners. But when they get old enough to start thinking about establishing their own credit or getting other credit cards (or their own Apple Card), they can elect to share their Apple Card spending with the credit bureaus. This is new to the industry and can help young people build credit history in a way that first started with parental oversight and spending controls.
The Apple Card co-owners and the participants will each receive Daily Cash for their Apple Card purchases.
-- Additional reporting by Sarah Perez