Apple Offering Pre-Approvals to iPhone Upgrade Program Customers Ahead of iPhone 8

[Burton8219]

I cannot fathom why do people fall into Apple's creative-financing rabbit hole.

Maybe I do not understand.

But this is what I have distilled (maybe possibly wrong):

1. The device is financed across 24 monthly payments without interest as a hard loan.
2. The loan is loaded with AppleCare+ and taxes, even though AppleCare+ is neither discounted (B&H) nor fully executed (see No. 5 below).
3. After twelve months (50% of loan) one can opt-in for a new hard loan.
4. But that requires turning-in as trade-in the fully-functioning device.
5. However, the market value of this unit is probably closer to 85% of its original cost (with AppleCare+ remaining for 12 months).
6. The AppleCare+ expense, which still has 12 months before expiration, gets washed-out.
7. The new loan will force another hard entry on your credit report, diminishing your credit score.
8. And, most insulting, if you decide to pay-off early the loan, Apple will pay back your used iPhone with an Apple Gift Card, for a fraction of its value.
9. Of course, you are responsible for the outstanding difference in cold cash.

A great deal for Apple and the financing company; lousy to every one else.

Did I get this right?

Some people just want a new phone every year and are fine essentially renting a phone from Apple with the option to keep paying and eventually own the device. I'm one of those people.

One hard pull every 12 months isn't the biggest deal... It drops your score 5 points AT MOST and will almost certainly correct itself in 12 months.

I don't understand the last two points of your list, though... If you either do the 24 payments or buy the loan out early, you don't HAVE to sell it back to Apple. It's your phone, sell to the person that gives you the highest dollar amount. If Apple gives you the highest dollar amount, but it's only on a gift card, sell the gift card. It's not as bad of a program as people make it out to be... People do the exact same thing with cars every day.
[doublepost=1505322921][/doublepost]

Thanks for explaining - that makes a bit more sense. Still not sure it's that great. I guess you pay at least the same (or more) then the value of the phone and AppleCare before you actually get to keep the thing, in exchange for the added value option of trading up after 12minths.

You pay exactly the value of the phone, since the loan has no interest attached to it.

 

[macduke]

Ok, Reddit seems to say that we can do pre-approvals now if you're an existing iPhone Upgrade Program member. https://www.reddit.com/r/tmobile/comments/6zuomb/tmobile_customers_can_now_upgrade_online_with_the/

 

[TeddyL]

Can someone corroborate this? I spoke with Apple and they don't seem to know what's going on. I've left a message with my contact I have in Apple Online Store Executive Relations to see what is up so hopefully she calls me back soon.
[doublepost=1505322877][/doublepost]
So I tried to go through the pre-approval process to see what it says. It says I have to use the Apple Store app on my iPhone. So I go into that, but it's locked to my iTunes account, and my iCloud and iTunes/app store accounts are separate because I have old accounts and you can't merge them. It says I have to log out of everything on my iPhone and log in with my iCloud account for iTunes/App store to be able to use the Apple Store app. But that will foul up a bunch of other stuff. This is so much BS. I really hate Apple's shopping experience. It shows I have no devices, but their help says that I just have to be logged in with iTunes stores on a device for the list to show up. I have no idea what's going on and I'm more confused now than I was before.

Im in the same boat as someone who previously had sprint on the IUP and is now with T-mobile. It's pretty confusing as to how the online system is going to work to allow us to reserve our phones for in-store pickup as its multiple places and apple reps that state that its allowed and others that don't.

 

[rtomyj]

Let me ask you a Q. I can give you $1000 now, or I can give you $1000 in a year. What will you take?
Now is the right answer. You always want to have money now.

The pricing to buy outright or payments was the same. So why would I give my money now when I can pay as little as possible interest free and extend it out for as long as I can?

Buying it this way is not "someone who can't afford" it's someone that understands economics and knows how to play the game. Now, if someone doesn't pay off the balance and let's interest build up on them, that's another story

So why do you feel bad for these people? They extend the contract at the risk of interest, it’s their fault. They don’t finish paying it and start a new contract, that’s on them. People want options, they get options and then blame because of too many options. Also, mister econ, more options means more compition. In this case, better incentives or lowers interest rates, or even longer promotion periods. ^_^

 

[Jmausmuc]

My thoughts on the new iPhones:

Under the iPhone Upgrade Program, the iPhone X is $15 more per month than my 128 GB iPhone 7 Plus. The iPhone 8 Plus is only $4 more per month. The iPhone X gains 0.3" of screen space (with a portion or notch of the screen completely cut out in videos and pictures). The iPhone X loses the well-established Touch ID, and replaces it with Face ID which Apple couldn't even get to work in their Keynote, and your family members, especially twins, can easily unlock your phone. Your iPhone X could also be unlocked if someone takes your phone from you and points it at your face. Both new iPhones get the new A11 Bionic Chip. The iPhone X gets 57 more PPI than the iPhone 8 Plus, but has the same screen brightness, which is less than half that of top competitors such as the Samsung Galaxy S8, Note 8, and LG V30. It's unlikely those 57 PPI extra on the iPhone X will really make that much of a noticeable difference. Both new phones will have True Tone displays. Both new iPhones will have the same f/1.8 aperture on the main wide-angle camera. Both new iPhones can record video with the same specs, including slow-motion video. Both new iPhones get the new Portrait Lighting mode. Both new iPhones get Bluetooth 5.0. Both new iPhones have fast-charing and Qi Wireless Charging. Most importantly, the iPhone 8 Plus has BETTER battery life than the iPhone X!

So where does the iPhone X really start to take over on features that actually matter? It has a smaller form factor by height and width, making it easier to hold and use in one hand. The iPhone X has a better f/2.4 aperture on the telephoto camera compared to the f/2.8 aperture on the iPhone 8 Plus. Not sure that 0.4 is that significant of a difference, but comparing the two in testing will tell. The iPhone X gets Optical Image Stabilization on that telephoto camera. The iPhone X can make Animojis. You're lying to yourself if you say you will actually use that more than once. And that's about it. I'm not at all convinced that those bumps on the X over the 8 Plus are worth an extra $11 more per month, losing battery life, and losing Touch ID.

Let me know your thoughts.

I agree with you. Thanks for the nice comparison, I didn’t even know many of these details. Especially that the screen brightness is that much lower than on competitors is pretty interesting - kind of contradictory to the news post here on MR where they said the amazing screen makes the iPhone worth its price.

The only thing I disagreed with is that the difference between the bezels is minimal. When you look at the two phones side by side there is no denying that the X looks more modern and fresh.

If you look at things objectively, the X probably isn’t worth the difference in price. But emotionally it is the only choice for me because I just don’t want another phone that looks just like the 6 I used to have and the 6S I use now ( I know there are some minor differences). I skipped the 7 for this reason, I just want something new. When the 6 came out I had just signed the lease for my last car. Last month, I got my new car, while my phone still looks the same.

 

[a.gomez]

Apple has offered a solution to it's bezels, and you don't like it. Therefore, you have no right to complain about Apple's bezels...

No idea what kind of logic that is. The real solution is the same as all the other random phones made in China (all an iphone is) that make little sense... not buying it.

 

[lsutigerfan1976]

With the carrier subsidies they built a fee into the contract that passed the cost of the phone onto you, but unlike the current installment plans those fees didn't come off the account after the contract was completed. So if you bought a phone and were still using it three years later you actually paid over list for the device.

I think it depends on whether you are on a grandfathered plan or not. Cause I was calculating how much I pay now for my monthly service. And even with the discounts it is still more than what I paid before. Cause before I would pay the same amount monthly as now. And just pay $200 every 2 years for a new phone.

Before I could pay let’s say $100 for my line. And then pay $200 for a new iPhone every two years. So let’s say my plan maybe $100 per month now. And if you finance the phone they give you a $20 price break per month. Dropping the plan to $80 per month. But it’s going cost me at least $40 a month to finance the cheapest iPhone I want. That brings the plan back up to $120 which is more than what I paid before when my old plan was $100 per month. And all you paid was $199 every two years.

So Verizon does this sneaky thing where they make it seem as if you get a price break for financing your phone. But it comes out to more than what I paid before. If that makes sense.

 

[Brian Y]

I think you need to review your understanding about hard credit checks.

There are two kinds of credit checks:
1. soft which have no impact (and not relayed to inquirers, other than you), and
2. hard which do have an impact on your score.

Hard credit check attributes:
1. [Persistent] They stay with you for two years.
2. [Multiplier] Number and frequency do impact, and lower, your score.
3. [Mandatory] Any financing request (car, credit card application, credit purchase) forces a hard credit check -- no exceptions.

Why? The number and frequency of hard checks on record indicate that you may be trying to live precariously. It scares off the finance companies, even though you may be paying on time, and penalizes you by increasing their perceived risk.

It is not a good thing unless you cannot resist -- obviously.

Yes, it shows that a credit search has been made, but it's still not a bad thing unless you're making multiple applications in quick succession.

It's more about frequency. As I previously said, if you make multiple applications in a short period of time, yes, it will damage your credit rating. But a check happening once a year for a phone is perfectly normal, and saying that it'll destroy someone's credit rating is just FUD.

 

[Cayden]

They do necessarily... Call Citizens One or Apple... they will confirm that every year, when you get a new phone, you are taking out a new loan on that phone, and there will be a hard inquiry every year before you are issued the new loan.

Go read the forums on this topic. There are many that DID NOT have a hard credit pull, just a soft pull. While they may be saying they hard pull everyone, they don't. Again I'm not saying that you won't get a hard pull, I'm just saying there are many that did not have a hard pull last year when renewing their loan

 

[UKPoliticsGuy]

Isn't this available for UK customers? The Barclays back-office infrastructure basically froze on launch day last time.

 

[gtg465x]

Ridiculous pricing. I long miss the days of subsidized iPhones. I'm still using my iPhone 5 which I paid $200 for. It has a cracked screen now and not the best battery, but in retrospect, it was the steal of a lifetime.

Yeah, but when iPhones were subsidized, carriers were charging about $20 extra per line for service in order to pay for the subsidy, meaning you paid an additional $480 over 2 years for service. In that sense, it wasn't actually a real subsidy since it was coming from your money. So you still paid about $680 for your iPhone 5, but $480 of that was built in to your service contract so that it would seem like you were getting a phone for $200.

 

[Larry The L]

$56 a month for a 256GB iPhone X....How is anyone gonna be able to afford this?!?!?
/s

How can they afford it? Easy. Many have good incomes or will give up a few unnecessary expenses to get something they really want.

$50 per month for X vs $35 for the 8. Even when you look at the monthly payment it's starting to look like a bad deal...

The monthly payment is based upon the cost of the item. If you can't afford the payments, then don't get the device.

 

[TheShadowKnows!]

Yes, it shows that a credit search has been made, but it's still not a bad thing unless you're making multiple applications in quick succession.

It's more about frequency. As I previously said, if you make multiple applications in a short period of time, yes, it will damage your credit rating. But a check happening once a year for a phone is perfectly normal, and saying that it'll destroy someone's credit rating is just FUD.

Brian, I am not trying to raise FUD; and certainly I do not want to debate with you the merits or demerits of applying for a loan just to buy a phone. (Yes, the Apple Update Program is a real installment loan, fed thru your credit card.)

If this is the only, or one of few, credit application(s) you make, then you are correct. One-a-year will not damage your rating. (But they do stay around for two years.)

Frankly, if you are applying for an installment loan just to pay a freaking phone, what are the chances that you are applying for multiple credit cards; maybe a car lease; maybe a school loan?

I would say they are high. And, no FUD required.

 

[colbertnation]

I cannot fathom why do people fall into Apple's creative-financing rabbit hole.

Maybe I do not understand.

But this is what I have distilled (maybe possibly wrong):

1. The device is financed across 24 monthly payments without interest as a hard loan.
2. The loan is loaded with AppleCare+ and taxes, even though AppleCare+ is neither discounted (B&H) nor fully executed (see No. 5 below).
3. After twelve months (50% of loan) one can opt-in for a new hard loan.
4. But that requires turning-in as trade-in the fully-functioning device.
5. However, the market value of this unit is probably closer to 85% of its original cost (with AppleCare+ remaining for 12 months).
6. The AppleCare+ expense, which still has 12 months before expiration, gets washed-out.
7. The new loan will force another hard entry on your credit report, diminishing your credit score.
8. And, most insulting, if you decide to pay-off early the loan, Apple will pay back your used iPhone with an Apple Gift Card, for a fraction of its value.
9. Of course, you are responsible for the outstanding difference in cold cash.

A great deal for Apple and the financing company; lousy to every one else.

Did I get this right?

You got this right, and I agree with your assessment. That's why after one year of IUP (specifically when I found out that the next iPhone would be another loan with a hard credit check), I immediately dumped that BS, and switched to my carrier's upgrade plan (which doesn't require me to go into a store).

It's not technically a loan (more of a "lease"), so they don't do credit checks (since I'm already with them postpaid, and paying bills monthly, etc.). It's more of a contractual commitment to pay for the phone per month, at 0% interest. I still end up paying for 50% of the phone, roughly, but I would rather not go through the headache and spend a lot more of my time selling my iPhone at the end of the year on eBay or some marketplace in less ideal conditions for roughly 20% of the phone's value. The residual "premium" is worth it for me to stay with the carrier plan, out of respect for my time and convenience.

 

[M.PaulCezanne]

I know it's obvious, but just wanted to point out that $56 is half-way to a car payment. Enjoy those animated emoji face things. You'll pay for 'em.

 

[Vanilla35]

The monthly payment is based upon the cost of the item. If you can't afford the payments, then don't get the device.

I'm strictly comparing whether the X is worth the 30%+ increase in cost, over the 8.

 

[TheShadowKnows!]

You got this right, and I agree with your assessment. That's why after one year of IUP (specifically when I found out that the next iPhone would be another loan with a hard credit check), I immediately dumped that BS, and switched to my carrier's upgrade plan (which doesn't require me to go into a store).

It's not technically a loan (more of a "lease"), so they don't do credit checks (since I'm already with them postpaid, and paying bills monthly, etc.). It's more of a contractual commitment to pay for the phone per month, at 0% interest. I still end up paying for 50% of the phone, roughly, but I would rather not go through the headache and spend a lot more of my time selling my iPhone at the end of the year on eBay or some marketplace in less ideal conditions for roughly 20% of the phone's value. The residual "premium" is worth it for me to stay with the carrier plan, out of respect for my time and convenience.

I agree with you. Others apparently do not. Because I got pushback, and I had not read the Apple's T&C's for this program.

So, I went all-in and read the actual document.

This is what I found (you can read the document yourself -- these are not "fake news"):

1. It is an installment loan, with an upgrade path available after 12 months. (It is not constructed as a lease.)
2. The loan is fed thru your credit card to which you are subject for monthly payments at 0% APR.
3. This loan triggers a hard credit check.
4. The loan does not carry 24 equal payments: the first payment pays both AppleCare+ and taxes in their totality + 1/24 of the device.
5. If you complete all 24 payments, which includes the super-charged first payment, you own the device.
5. If you decide to upgrade at 12 months, but decide to return the new upgraded device because you do not like it, things get complicated.
6. This because the first installment (now made on the upgraded device) carries both all AppleCare+ plus taxes -- the refund gets messy.

This will be my last post on this matter. Simply, to each his/her own.

 

[ghostface147]

For six bucks, might as well get the 256 gig version of the X. But I just can't get it because of the notches when in landscape. I don't mind it in portrait.

 

[Larry The L]

I know it's obvious, but just wanted to point out that $56 is half-way to a car payment. Enjoy those animated emoji face things. You'll pay for 'em.

I don't understand your complaint. Why are you trying to bash people who can afford some luxuries just because you can't or don't want to pay? I always buy my new Lexus outright every other year. But if I made payments, $56 wouldn't be close to half of a payment.

 

[Clawdawg]

Let me ask you a Q. I can give you $1000 now, or I can give you $1000 in a year. What will you take?
Now is the right answer. You always want to have money now.

The pricing to buy outright or payments was the same. So why would I give my money now when I can pay as little as possible interest free and extend it out for as long as I can?

Buying it this way is not "someone who can't afford" it's someone that understands economics and knows how to play the game. Now, if someone doesn't pay off the balance and let's interest build up on them, that's another story

This logic applies for a one-time, long term acquisition, but not for those re-upping every year for the new phone. Let's use the 8 Plus 256GB as an example. Through Apple the monthly payment is $45.75 (leaving all taxes out for simplicity). Outright purchase is $949, but bumps to $1,100 with AppleCare+. I already have a buyer (same one every year) for my 256GB 7 Plus, at $700. This makes the effective cost of the 8 Plus in this example $400. However, since I get damage coverage through my business card I don't need AppleCare+, so net cost to me is $250. This, compared to the $550 12 month cost through Apple (and owning nothing), is a no brainer for me.

 

[M.PaulCezanne]

I don't understand your complaint. Why are you trying to bash people who can afford some luxuries just because you can't or don't want to pay? I always buy my new Lexus outright every other year. But if I made payments, $56 wouldn't be close to half of a payment.

I'm not complaining. Just pointing out that the price/utility ratio is off the charts. But hey, good for you! Have fun with your new toy!

 

[zapm]

How can they afford it? Easy. Many have good incomes or will give up a few unnecessary expenses to get something they really want.

Yeah I was being sarcastic. Hence the /s

 

[Lax608]

A hard credit check shouldn't a big deal for most. Even if you're actively home shopping or looking to buy a car, it's not going to impact your credit score. You act like a credit check is some kind of death blow. It shouldn't matter to anyone with decent credit.
[doublepost=1505315127][/doublepost]

Well, kind of. I upgraded last year around this time and when I bought a new house over the summer it came up and I had to explain it to the underwriter. After it was explained, my mortgage went through without any issues. With that being said it is advised very strongly by anyone in banking that once your mortgage is with the underwriters you shouldn't do anything at all with your credit. They will pull your credit between 3 days and the night before you close to make sure nothing has changed. If you are buying a house and your mortgage is with the underwriters I wouldn't upgrade until after I close. Remember, getting a mortgage is more than just a credit score now; its much more rigorous.

 

[M.PaulCezanne]

You got this right, and I agree with your assessment. That's why after one year of IUP (specifically when I found out that the next iPhone would be another loan with a hard credit check), I immediately dumped that BS, and switched to my carrier's upgrade plan (which doesn't require me to go into a store).

It's not technically a loan (more of a "lease"), so they don't do credit checks (since I'm already with them postpaid, and paying bills monthly, etc.). It's more of a contractual commitment to pay for the phone per month, at 0% interest. I still end up paying for 50% of the phone, roughly, but I would rather not go through the headache and spend a lot more of my time selling my iPhone at the end of the year on eBay or some marketplace in less ideal conditions for roughly 20% of the phone's value. The residual "premium" is worth it for me to stay with the carrier plan, out of respect for my time and convenience.

iPhones hold their value relatively well. It's become rather clear that by far the most cost effective solution is to buy them outright and sell them on the secondary market when you're ready for a new one. If you don't have the cash, no big deal. Just SAVE it until you do. The incremental updates over the last 3 versions have been minimal vs. the cost anyway. You really aren't going to miss much if you have to wait a cycle or two.

 

[leesweet]

Anyone see how to do this for a NEW IUP additional line (on one you already have)? I can do this for the phone I already have (but I'm going to do an X on that one, that's an upgrade). I want to add an 8 on another line on my account, so this would be a new IUP setup. I click on the 8 and can't get any further in process because it's not available.

To answer my own question, the last FAQ in the list for the IUP in the Apple Store App says this is only to preapprove 'Upgraders'. So, for the 8's you can do it now, since it's less than four days to preorder. I assume the same process will open for those of us waiting to preorder an X on 10/23 or so.

It says it can't be used for 'new' applications, which I want to do to get a new phone on my other line (a new phone in the IUP totally), and that you can do that once orders open Friday at 12:01AM PT.