Apple Card Owners Will be Able to Purchase an iPhone and Pay Over 24 Months With No Interest Starting Later This Year

[bigpics]

How will this work for people like me who pay off their interest bearing balance in full every month in order to pay no interest on the card period....??

Will it be siloed away from the rest of my purchases and just an "in full plus phone installment" every month to pay 0 interest....??

 

[Laces Out]

The downside to this route (as opposed to iUP) is that carrying a balance negatively affects your credit score, as it is counted on a per card basis as well as overall. Given that these phones are $1-2k at this point, to maintain good credit usage you’d need to have a $3500k+ limit, excellent would require $5-10k+. Carrying over 30% on a single card will affect your credit to a notable tune.

iUP doesn’t count toward your credit usage and so long as you maintain the program and avoid the hard hits in this case it seems to still be the better option. Minus the lack of 3% cashback and necessity for AppleCare+, obviously.

I’ve been tracking my score for about 8 years and I agree but would also underscore that credit usage (debt to credit ratio) is calculated using the aggregate numbers for all open accounts.I think most people have more than one card and the ideal ratio is 6% and under. Also,credit usage accounts for 30% of the FICO score but payment history accounts for 35%. Moral of the story...... pay on time and don’t go to collections.

 

[SurferPup]

I want an Apple Card here in Australia.

 

[brenton289]

I think I'll wait for the Apple Card Pro Max Plus S X R C.

 

[RUQRU]

I want the Apple Card to have a web portal too that integrates with Quicken.

 

[Tech198]

apple knows how to get people to buy stuff. this definitely makes it more difficult to resist.

I do like the 24 months with no interest.. but since Apple card is not available in Australia yet,, i can easily resist

I only had 55 day with my CC.

 

[HacKage]

With iPhone Upgrade Program, you already have a 20 month interest free loan, and the ability to return your handset after 11 months for an upgrade. Why would I choose this method over that?

 

[iapplelove]

Why would anyone in the world want to pay off an iPhone in 24 months. To me that’s just insane even with zero interest.

It’s a phone, why not just buy it in full and be done?
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I had a feeling they would do this back when I applied day 1 which was one of the reasons why I applied. It’s a smart move for Apple.

The fact that it’s a smart move for Apple makes it wrong for consumers. Again even at zero percent most people who still can’t afford a new phone, or even worse don’t even need a new model will buy one and end up making payments for two years lol...

 

[cardfan]

Just keep in mind you can’t use your card to make normal purchases unless you like paying interest on those. Not til your phone is paid off. You should finance through a carrier like Verizon if you need monthly pmts.

 

[iGeek2019]

Not for a long time. There's a reason most countries have way less rewards cards than the US.

If/when it launches outside of the United States here in Europe there’s no way the ‘rewards’ will be as generous due to the Interchange Fee cap brought in a couple of years ago which has left a handful of credit card companies offering 0.5% cash back and/or removing their rewards altogether.

 

[Expos of 1969]

Why would anyone in the world want to pay off an iPhone in 24 months. To me that’s just insane even with zero interest.

It’s a phone, why not just buy it in full and be done?
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The fact that it’s a smart move for Apple makes it wrong for consumers. Again even at zero percent most people who still can’t afford a new phone, or even worse don’t even need a new model will buy one and end up making payments for two years lol...

Some who can afford a new phone and could afford to "buy it in ful and be done" will choose the zero interest 24 month approach. Why give Apple all your cash at once when there is no reason or benefit to doing so?

Please explain how paying off the phone in 24 months at the same cost as buying it in full is insane.

 

[MikeVarney]

I so hate debt that this isn't something appealing to me. I paid my car off a little over a year into a 5 year loan because I hate knowing I owe money. I even wanted to pay off my optometrist before they sent me my bill (I know how much I owe based on the insurance EOB).

Not to stray from the topic of the thread, but it comes to the differing costs of debt. So with a no-interest phone payment you would pay the MINIMUM payment of that debt while using the maximum amount possible for a payment on your car loan (for example) which carries an interest rate. Thus your goal of spending as little as possible on interest can be furthered.

 

[nostresshere]

What am I missing. All the carriers have deals with zero interest. And by the way, there are lots of deals to ge a SERIOUS discount when buying a phone from carriers - vs Apple at full price.

 

[kingax1]

I think I'll wait for the Apple Card Pro Max Plus S X R C.

I want a smaller Apple Card, maybe a Apple Card SE and clip it to my keychain like a grocery card, but I think they will screw it up and make it a little bigger than I wanted. Just makes no sense to have all that real estate when all you need is a few numbers and a tiny chip. No Keyring hole no deal!

 

[mdatwood]

Why would anyone in the world want to pay off an iPhone in 24 months. To me that’s just insane even with zero interest.

Time value of money - Wikipedia

en.wikipedia.org

Basic finance. The longer I can put off giving someone my cash, the better it is for me. 0% interest is effectively further discounting the purchase. Assuming some inflation, every payment is relatively less than the one before it.

 

[travoose]

This seems like something that would be announced around Thanksgiving, in time for Black Friday; pull people in by offering 3% cash back...then get people hooked into the credit card by allowing them to pay it off with 0% interest over the course of 24 months.

Hopefully this expands to other products and the iUP.

 

[ibivibiv]

I'd rather buy it with a card that extends the warranty by a year....worked out well for me in the past with iPhone 6 repair (Discover).

Yes, but the strategy all along has been to up the prices but then offer an installment plan to make it seem..... "less expensive". Your use case is an informed consumer decision. They want the person that wants to appear to be able to afford a luxury item. By making a payment plan they can raise prices and still maintain revenue.
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Time value of money - Wikipedia

en.wikipedia.org

Basic finance. The longer I can put off giving someone my cash, the better it is for me. 0% interest is effectively further discounting the purchase. Assuming some inflation, every payment is relatively less than the one before it.

This one has taken the "Red Pill". Good for you sir.

 

[frumpywumpy]

I wonder if Apple will allow this for SIM-FREE iPhones so that you're not required to have an account with one of the big 4 phone service companies to qualify... that way people who use Prepaid phone companies like Cricket Wireless or Boost Mobile join unlike the iPhone Upgrade Program or Apple iPhone Payments require

This is my exact question.

 

[Ronlap]

Hopefully we can upgrade very year like the iUP program.

Upgrading every year is what has kept me OUT of the iUP program. I want to upgrade when I want to upgrade, not when some program requires me to upgrade -- oh, and I want to own whatever device I paid for so that I can either repurpose or sell it on my own and not have to trade it in.

 

[emulator]

Still no sign up bonus, this card is very much useless.

 

[phgreer]

I was going to buy an iphone 11 pro today but with this news should I wait?

 

[chrono1081]

With iPhone Upgrade Program, you already have a 20 month interest free loan, and the ability to return your handset after 11 months for an upgrade. Why would I choose this method over that?

This method gets you 3% cash back.

 

[xodh]

I could see Apple doing a black card for high rollers like AmEx.

Did you mean Space Grey? 🧐

 

[jeffkoontz]

I pity anyone coming at this thread with questions - it just gets more confusing as you go.

For how the two programs are the same:

I currently participate in the iphone upgrade program through Citizens. I have my payments set up to pay through the Apple Card monthly and I have my AppleCard set to pay the entire balance off monthly. I pay zero interest. I get 3% cash back for the phone payments.

This new program also offers zero interest and 3% cash back.

For how they are different:

The main advantage/difference would be the ability to hold $1200 for 24 months an pay off at the end - rather than paying monthly. You'd get the $36 cash back when you buy the phone, then you could invest the $1200 and if you could get 3% rate of return, another $72 on your money.

The new program appears to be an alternative that does not involve Citizens Bank and still provides the same 3% cash back. However, as others have mentioned, there is no mention of annual upgrade availability and I wonder how the program will actually work.

If I have my card set to pay the full balance every month, and I want to take advantage of the 24 months interest free loan, there are some mechanics that I'd probably need to understand.

Assuming you are a good at your personal finances, you'd want to hold on to your $1200 (price of phone) until month 24. (time value of money-wise) However, you also have a bunch of other things on your card that you'll need to pay off every month to avoid interest. So, if you have Apple music, a couple of movie downloads, icloud storage (I use my card for anything Apple gives me 3% for) and have another $50 a month in charges to pay off and you have a $1200 phone purchase, how does it keep track of the payments? Say you have $25 in charges early in the month, then buy the phone, then have $25 later in the month, at the end of the month you pay off $50 - how does Apple know that you only want to pay off the $50 that will accumulate interest in the next month, vs paying down part of your phone?

 

[siger10k]

If you have to finance an iPhone, maybe you shouldn't buy one.