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

[cardfan]

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 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?

The answer is simple. Say you make a purchase for 1200 for 24 months 0 percent. If you make any other purchases, then you CANNOT pay them off.

So if you charge your card for Apple Music for 15. You cannot simply pay 15 and pay that off. You’ll be paying interest on that 15 until you pay off the whole balance which includes the 1200.

When you finance something on a cc for zero percent over a time period, then you have to be careful not to purchase anything else. Same thing happens with you do a zero percent balance transfer. You basically have to leave that credit card alone as you pay off the transfer.

 

[I7guy]

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

I disagree. 0% loan? I am in. (I look for the same deal with cars) I usually pay cash, but this is too good to pass up and I would just use the card to purchase the phone.

 

[iHurtle]

They could set it up so as to be able to pay monthly purchases plus minimum payment on phone and still pay no interest. That is if that want to stay true to what they advertise with their card, that they try to help you from paying interest...

 

[siger10k]

I disagree. 0% loan? I am in. (I look for the same deal with cars) I usually pay cash, but this is too good to pass up and I would just use the card to purchase the phone.

Yeah if you're smart with money and understand time value of money and don't just get into debt. But I know so many people living paycheck to paycheck who still get the latest iPhone when they already have debt and no savings. This will appeal to a lot of those people.

On a side note, is it 3% back AND 24 month financing, or one? Best Buy either lets you finance with your card OR get 5% back.

 

[cardfan]

I disagree. 0% loan? I am in. (I look for the same deal with cars) I usually pay cash, but this is too good to pass up and I would just use the card to purchase the phone.

This isn’t anything new. What do you think carriers offer? It’s zero percent. Plus it’s not reported to bureaus. Why would anyone want to use a cc when carriers are lining up to zero finance you? Crazy.

They could set it up so as to be able to pay monthly purchases plus minimum payment on phone and still pay no interest. That is if that want to stay true to what they advertise with their card, that they try to help you from paying interest...

They could but that’s not how it works. Why do you think they make these offers. They hope you’ll keep using the card.

 

[iapplelove]

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.

Basic finance ?

How do you figure every payment is less than the last? The value of the phone will drop while payments are still due. One may even want a new phone before all payments are made making them still responsible.

I dunno maybe it’s just me, but I alwasy pay eith cash or I don’t buy. And I invest rather than have payments with anything zero percent or not. I do not like payments.

 

[iHurtle]

They could but that’s not how it works. Why do you think they make these offers. They hope you’ll keep using the card.

I agree, which is why whenever I have done a deal like this in the past it is the only thing that goes on the card. If theY set it up the traditional way I will pass as I don't want to have to shelve the card. I am holding out a SMALL amount of hope that Apple will be different than all the corrupt financial institutions.

 

[adbe]

Basic finance ?
How do you figure every payment is less than the last?

Inflation. Money devalues at ~2-3% a year. If you borrow money that will be put to work today and pay it back interest free next year, you're ahead 2%.

 

[I7guy]

This isn’t anything new. What do you think carriers offer? It’s zero percent. Plus it’s not reported to bureaus. Why would anyone want to use a cc when carriers are lining up to zero finance you? Crazy.

Don’t want to go through carrier. This is better for me. Anyway, to each their own situations.

 

[DotCom2]

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....??

I can only assume that it will only show that currents month's installment in the total balance. So you would pay the the whole balance each month and avoid interest. It would show, for instance, installment 1 of 24 and the next month installment 2 of 24 etc.

 

[tripleburst]

The answer is simple. Say you make a purchase for 1200 for 24 months 0 percent. If you make any other purchases, then you CANNOT pay them off.

So if you charge your card for Apple Music for 15. You cannot simply pay 15 and pay that off. You’ll be paying interest on that 15 until you pay off the whole balance which includes the 1200.

When you finance something on a cc for zero percent over a time period, then you have to be careful not to purchase anything else. Same thing happens with you do a zero percent balance transfer. You basically have to leave that credit card alone as you pay off the transfer.

What? They can keep track of what you purchase that involves 0% financing and for how long you need to pay it off. You can purchase Apple Music for $15 as long as you pay the monthly iPhone payment plus the $15 for that billing period so you don't incur interest.

 

[predation]

Introduce 5% cash back unlimited and i'll ditch ALL of my cards.

 

[HacKage]

This method gets you 3% cash back.

So for an iPhone 11 purchase I would receive £21.87 cashback (around £1 per month over the term of the IUP), but lose the convenience of being able to hand my phone back after 11 months for the new model?

 

[tripleburst]

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?

I'm pretty sure you'd need to pay the monthly payment to hold the 0% loan. We'll see when the details come out.

 

[BeefCake 15]

Only downside on the card is that it doesn't export out information to Mint or other similar apps so I can track spending and balance.
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Isn't with the Citizens program, you get to do the interest free once but this one will allow you to do it every purchase as long as you have the card?

 

[brofkand]

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).

Discover no longer offers this benefit as of at least a year ago, possibly more. It was a silent discontinuation.

They've reduced and ended a lot of benefits lately, I'm considering cancelling my card with them.
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Only downside on the card is that it doesn't export out information to Mint or other similar apps so I can track spending and balance.

Giving your financial data to Mint completely negates the privacy stance that Apple has taken with the Apple Card.
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All VISA Signature cards have warranty extension, and there are at least a dozen banks offering VISA Signature cards with no annual fee. Famous ones would be Chase and Capitol One.

For MC it depends on the card. Mine still has the benefit and no annual fee.

Of all my cards, none have annual fees, and only Discover card dropped the benefit. In fact, I'm starting to wonder why I'm keeping the Discover card.

Same here, Discover has really cut back on benefits lately. I'm thinking of cancelling mine as well. The only reason I still have it now is it has my largest credit limit, but even my next card is more credit than I would ever need.
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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.

You have to use a carrier that supports phone financing. I am on prepaid, they don't offer financing. The Apple iPhone Upgrade Program doesn't work with Prepaid.

If Apple Card financing works with prepaid and allows you to buy SIM-free phones, it would be a great way to go for people who want to finance an iPhone but are on prepaid or otherwise want a SIM-free device.

 

[tripleburst]

If Apple Card financing works with prepaid and allows you to buy SIM-free phones, it would be a great way to go for people who want to finance an iPhone but are on prepaid or otherwise want a SIM-free device.

I hope hope hope the Apple Card financing finally allows us to buy SIM-free so we can avoid the stupid activation fee.

 

[brofkand]

I hope hope hope the Apple Card financing finally allows us to buy SIM-free so we can avoid the stupid activation fee.

That is my hope as well. My guess is it will but time will tell.

 

[nims]

Called this, the day the AppleCard was available. The iPhone has become a service

 

[cardfan]

What? They can keep track of what you purchase that involves 0% financing and for how long you need to pay it off. You can purchase Apple Music for $15 as long as you pay the monthly iPhone payment plus the $15 for that billing period so you don't incur interest.

Guess we’ll see.

 

[26139]

Excellent response from @newyorksole though..

You do realize you were wrong about this, correct?

 

[turbineseaplane]

@26139 👍

You do realize you were wrong about this, correct?

Glad to hear it
Would you like me to fix the original post and you'll delete your reply above?

 

[gugy]

Thanks MOM
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Meanwhile, I'm still stuck in 'Unable to verify your identity' on my Apple Card application. Anyone else still having the same issue?

You're welcome, my daughter.

 

[jettie1767]

So only folks with existing iPhones and an Apple card can take advantage of this, right? If you currently don't have either, there is no way to avail of this financing? Say, for example, if I am a first time iPhone buyer and I went to the Apple.com website, can I directly apply for the Apple card so I can finance the purchase?

 

[4sallypat]

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

People like you should buy a phone for everyone.

When a manufacturer is offering 0% financing, why not take advantage of using their money instead of yours ?

Would you buy a car cash outright instead of taking advantage of 0% for 36 months ?

If something would happen to the car (stolen or totalled) during the 36 months, you would lose a huge amount of money you paid for up front.