iPhone Upgrade Program Causing Headaches for Some Launch Day Customers

[Mr. Chewbacca]

They did. It's called Apple Care. If you read the terms of the plan you are required to purchase Apple Care, and if the phone is damaged when you take it back you are required to use one of your Apple Care incidents, and pay the deductible to have it repaired before you return it. If you are out of Apple Care incidents you are liable for the repairs to the phone.

I don't think that is the case, I was offered a 24 month plan that did not include apple care or the ability to upgrade after a year. It was about 5 dollars a month cheaper. I didn't do it but it was an option.

 

[Moorepheus]

Not my experience at all. In fact I purchased THREE NEW iPHONES via Apple's new program and all went super super smooth. The contracts say that they (the card you used to secure the "loan") will charge the tax and first payment in 3 days.

Even one of my older iPhone 6+ was on a Next plan contract with At&t... I can either turn in that phone, pay it off and keep it or sell it. This Apple Plan is totally separate for those wondering.

I'm actually THRILLED that I am CONTRACT FREE from the grip of At&t!!!!!!!!!!!!!!!!! Yahhhhhhhhooooooooooooeeeeee!!!

I will say WITHOUT A DOUBT this is BY FAR for ME the best and most easiest iPhone on-sale experience I have EVER had to date. HUGE IMPROVEMENT over last years nightmare. HUGE!

Thank you Apple!!!

This rocks!!

I am curious what AT&T will do if you turn in the iPhone you have on the NEXT plan. Will they just forgive the remaining you own? Will they charge you some fee. Currently I am on the Next 18 and I would be interesting upgrading to the APPLE upgrade plan, but, I might just wait another year and get the 7 on the apple upgrade plan then

 

[tsboy69]

AppleCare+ is included in the monthly price. Now the question I have is, if you turn in the phone after 12 months for the upgrade to the iPhone 7 will you get a refund on the remaining 12 months of AppleCare+.

No, it just rolls over and you would start over again.

 

[stanhope]

Apple launched its iPhone Upgrade Program today in the U.S., enabling customers to purchase the iPhone 6s or iPhone 6s Plus with AppleCare+ coverage included for 24 equal payments of between around $30 and $45 per month depending on the model. After at least 12 monthly payments, the customer can upgrade to a new iPhone and restart the 24-month payment cycle.

Apple stipulates that the iPhone Upgrade Program is available to qualified customers only with a valid U.S. personal credit card, since the program is based on a 24-month installment loan with a 0% APR from Citizens Bank. For customers with good credit, most did not expect this requirement to be an issue. But, as launch day unfolds, some customers have had frustrating experiences.

MacRumors user onujpt writes that he was declined from the program, despite having good credit and an Apple Barclaycard with a $4,000 available balance, in the iPhone Upgrade Program Experience Thread in our discussion forums. Many other users shared similar experiences in the thread.MacRumors user inkyoto echoed similar frustration in his thread Nightmarish Experience With Apple Upgrade Program in our discussion forums, noting that he was denied approval for the iPhone Upgrade Program with both Chase and Bank of America credit cards despite having "flawless credit."It is possible that iPhone Upgrade Program approvals have been experiencing problems due to the high volume of traffic today in Apple Stores, but in the meantime some customers with good credit may be forced to pay upfront or walk away empty handed. Alternatively, some customers may opt for a carrier financing plan from AT&T, Verizon, Sprint or T-Mobile.

Enrolling in the iPhone Upgrade Program requires visiting an Apple Store. Apple states you must be at least 18 years old and bring your current iPhone, a valid personal credit card, your personal information and two forms of identification and your carrier information, such as your wireless account password. The full terms and conditions are posted on Apple's website.

Article Link: iPhone Upgrade Program Causing Headaches for Some Launch Day Customers

 

[lah]

Macrumors, without seeing the credit reports I would hazard a guess that most of the declines are due to the person having used too much of their open credit. The credit score does not mean sky's the limit. It means good payer. In you example above, ask the person how many cards they have active, and how much is used. Ask them to assess the Debt to Income ratio. The person had 4K of open credit. So use it. Instead they want to open more.

I suspect, being this is their first time, Apple may have tweaked the requirements a bit, but most people who think their credit is good don't understand credit, and are wrong. A decent score these days exceeds 760.

Not in my case. I have good credit and not too many credit card accounts with zero balances. Pay them in full each month. My total household income is very high so my debt to income ration is good - getting a < 1000 dollar loan should not be a problem. Not sure the reason I was declined so I will wait for the rejection letter. This whole thing doesn't make sense to me. Oh well at the end I got my phone, just not the way I wanted to pay for it. I was doing this more for the ability to upgrade every year without having to deal with the carriers.

 

[petemill]

Can someone who has gone through the process by putting the new phone on an existing account verify something for me?

I have an appointment to go to the Apple Store tonight. The idea of doing this was attractive to me for two reasons. First, I could use other peoples' money to finance the phone over two years. Second, I could do this without involving Verizon, and thereby avoid their stupid $40 upgrade/activation fee.

But the fine print on the deal leads me to believe that I have to somehow bring Verizon into the mix on this, and "activate" the new phone with them. This is technically unnecessary, because all I really need to do is put my existing SIM in the new phone and it will work. If I have to involve Verizon in this transaction in any way I am not interested in doing it. I'll just pay cash for an unlocked phone and go on my way.

Can anyone verify that they tried, and were successful in just buying the phone without involving giving carrier account information?

Unfortunately they run it like a normal carrier upgrade - you must log in with your account details for any of the 4 carriers in the Apple store. I had trouble because my t-mobile account was not 'the right kind of account' for the IUP. The Apple Store guy said that Apple were allowed to do the IUP as part of a deal with the carriers... So this isn't wholly a way to free us up from the carriers. Perhaps when the truly SIM-free version of the iPhone is released in a few months they will allow this, but probably not.

 

[stanhope]

Apple's systems that integrate into anybody's credit system suck. Magnify that by launch day, round the world activity and you have the making for a complete mess. My guess is that the requests were not routed to the right source. Recognize what I found out..a large purchase from an electronics store in many cases automatically raises a flag. The credit policy for most credit granters is when in doubt...DENY THE PURCHASE. When it happened to me in Boston, I called right away...I bypassed the original agent on the phone and straightaway asked for a manager. Hate to say it but the first line of interface has no power and often can't think beyond what a computer screen tells them. The supervisor had things cleared up with an intelligent explanation within 5 mins. I left the store with my purchase in hand.

 

[0970373]

Not in my case. I have good credit and not too many credit card accounts with zero balances. Pay them in full each month. My total household income is very high so my debt to income ration is good - getting a < 1000 dollar loan should not be a problem. Not sure the reason I was declined so I will wait for the rejection letter. This whole thing doesn't make sense to me. Oh well at the end I got my phone, just not the way I wanted to pay for it. I was doing this more for the ability to upgrade every year without having to deal with the carriers.

Actually the fact that you don't carry balances is probably why you didn't get approved. They want to know you can make monthly payments and show a history of it. So your high credit score may be there but you likely don't have enough credit history, based on the info you provided above. Do you have previous loans or have you ever carried a balance or make monthly payments on anything?

 

[stanhope]

Not in my case. I have good credit and not too many credit card accounts with zero balances. Pay them in full each month. My total household income is very high so my debt to income ration is good - getting a < 1000 dollar loan should not be a problem. Not sure the reason I was declined so I will wait for the rejection letter. This whole thing doesn't make sense to me. Oh well at the end I got my phone, just not the way I wanted to pay for it. I was doing this more for the ability to upgrade every year without having to deal with the carriers.

I really hate when uninformed people give pat answers like here. You said it yourself, you didn't see a credit report and just hazarded a guess. How ignorant. As you can see from the response, the theory was wrong. Next time, please wait for the facts before you go off to la la land.

Apple's systems that integrate into anybody's credit system suck. Magnify that by launch day, round the world activity and you have the making for a complete mess. My guess is that the requests were not routed to the right source. Recognize what I found out..a large purchase from an electronics store in many cases automatically raises a flag. The credit policy for most credit granters is when in doubt...DENY THE PURCHASE. When it happened to me in Boston, I called right away...I bypassed the original agent on the phone and straightaway asked for a manager. Hate to say it but the first line of interface has no power and often can't think beyond what a computer screen tells them. The supervisor had things cleared up with an intelligent explanation within 5 mins. I left the store with my purchase in hand.

 

[iPhone1]

Everything was going fine until they ran my credit card. Used my Gold AMEX but was told I was ineligible for the program.

My credit is excellent and my AMEX has no preset limit so it can handle the three month charges no problem. Very frustrating and embarrassing. I can afford $44 a month no problem. I was told to call Citizen on Monday and see what they can do.

All these posts make me feel hopeful that it might just be first day glitches. I was also told that if approved via phone, I could come back and "return" the phone (I bought it outright) and "buy" it again using the upgrade program without having to swap hardware.

We shall see. Calling Monday, enjoying phone in the mean time.

 

[lah]

Actually the fact that you don't carry balances is probably why you didn't get approved. They want to know you can make monthly payments and show a history of it. So your high credit score may be there but you likely don't have enough credit history, based on the info you provided above. Do you have previous loans or have you ever carried a balance or make monthly payments on anything?

Sorry I mistyped. I meant to say I don't have too many credit cards all of them high limits (4 accounts) and none have a balance. In other words, I have a lot of available credit. I pay my cards in full each month.

 

[sketdansuu]

I was in and out in ~10 mins, it's a far cry from 24 months earlier when I got declined by T-Mobile and never gave me reason why. Feels good man

 

[Shanpdx]

I'm actually THRILLED that I am CONTRACT FREE from the grip of At&t!!!!!!!!!!!!!!!!! Yahhhhhhhhooooooooooooeeeeee!!!

you could always buy unlocked iPhone and contract FREE ... I am contract FREE last three years and used unlocked iPhone 5 then and iPhone 6 now.

 

[0970373]

Sorry I mistyped. I meant to say I don't have too many credit cards all of them high limits (4 accounts) and none have a balance. In other words, I have a lot of available credit. I pay my cards in full each month.

Same questions apply though. Do you have any history of making monthly payments on anything? Paying your cards off every month doesn't really help you build credit, unfortunately. As it is a loan, you need a good history of installment payments in addition to DTI, credit score, etc.

 

[sscerberus]

I was told 3 times it was a soft pull. I guess I will find out Monday when I get my credit report. But I was approved without a problem.

If it was a hard pull, I really hope they don't require a hard pull every year. That would be ridiculous.

I have several friends who still work at the Apple Store from when I used to... It is a hard credit inquiry and every year you have to reapply and have another hard inquiry performed.

 

[lah]

Same questions apply though. Do you have any history of making monthly payments on anything? Paying your cards off every month doesn't really help you build credit, unfortunately. As it is a loan, you need a good history of installment payments in addition to DTI, credit score, etc.

Yes, a mortgage, 3 car loans (2 paid off , 1 current). Believe me, I've been around the credit block a while and I've rebuilt my credit from my previous mistakes of my youth. It has been spotless for the past 20yrs.

 

[Taz Mangus]

They did. It's called Apple Care. If you read the terms of the plan you are required to purchase Apple Care, and if the phone is damaged when you take it back you are required to use one of your Apple Care incidents, and pay the deductible to have it repaired before you return it. If you are out of Apple Care incidents you are liable for the repairs to the phone.

That is what I was referring to, AppleCare+ as the insurance.

 

[DustinLH00]

New things like this are usually a mess. I remember t mobile had a mess last year and this year it went smooth

It was not smooth for me this year. I called right at 12:00PDT, had to sit on hold for 30 minutes, go through a 45 min ordering process, only to find out hours later that she ordered the wrong phone. Had to call back and wait for over an hour to get the right one ordered. Still got it today though, so less angry now.

The fact that T-Mobile couldn't do online pre-orders and made people call in was ridiculous. The fact that you had no order confirmation of any kind until 12 hours after ordering was unacceptable as well.

Why don't people just pay for the phone upfront? Knowing we upgrade every year.... buying the phone outright has been simple for us.

We pay $950 upfront then sell the old phones for $550. So we pay $400 per year and don't have to worry about these programs.

If someone needs to finance the phone they should not buy one. Pay cash upfront and keep it simple....

Note: There are so many plans and options that we (all of us) don't really understand. I remember when a worker at ATT tried to explain Next... They finally said they didn't really understand it themselves. So I think it keeps it simple to just buy the phone outright.

A phone should be a tool not a frivolous purchase. If an Apple product will cause you to go into debt... don't buy one. The market is full of devices that don't cost $700 +

What you make in interest on 950 in one year is not worth the time of making a monthly payment. But thats just my opinion. Also if you have accounts that have a good rate of return.... a one time payment of 950 won't hurt you.

It is a proven fact that you will spend more when using a credit card vs. cash. The extra you spend could be invested and earn more than your credit card points....

I can see where you are coming from. I don't feel my intent was to come off that way, I apologize. For me, I have trouble understanding why someone would finance something while possessing the cash.

I just wanted to put all of your rude ass snarky comments together for you to re-read.

I'm confused. So if you decide to upgrade after one year you hand your current phone back after half paying it off??!?? That doesn't sound like a good deal!

This program is great if you pay it off over two years without a carrier contract and get to keep the phone, but handing it back after you've half paid it off sounds like a rotten deal.

Am I reading this wrong?

You can still pay for the 24 months and not trade it in after a year and own the phone if you want. It is a 24 month loan with an option to upgrade early after 12.

Does anyone know why Apple is using Citizens Bank for this? Is it hard for non-banks to set up leasing arrangements? Setting up the Upgrade Program worked smoothly for me this morning, but it felt creepy to be reading terms and conditions from a bank I'd not heard of half way through the process.

Because very few banks would be willing to take on this kind of small lending at scale, without any interest whatsoever, but all of the risk. What bank would you prefer do it?

AppleCare+ is included in the monthly price. Now the question I have is, if you turn in the phone after 12 months for the upgrade to the iPhone 7 will you get a refund on the remaining 12 months of AppleCare+.

You don't get a refund cause you didn't pay for it. You are paying for half the phone and half the AppleCare.

If you need credit to buy a phone, then you can't afford a new phone yet, friend. Please don't ruin your life for a minor incremental upgrade. Just save more money.

Ruin your life with a 0% loan that is basically what everyone has been doing with 2-year carrier contracts for years anyways?

I don't think that is the case, I was offered a 24 month plan that did not include apple care or the ability to upgrade after a year. It was about 5 dollars a month cheaper. I didn't do it but it was an option.

You were probably offered a carrier finance plan. All of the Apple plans include AppleCare and offer the ability to upgrade.

 

[CrAkD]

When I saw all the nonsense on here about hard pulls on credit and people with perfect credit getting declined I decided to just upgrade on next. I reserved my 6S+ 128gb unlocked full price when i walked in the Apple Store I told him I was just going to get it on next instead he said no problem. My reservation was at 430pm too.

 

[Treq]

I didn't have any problem this morning at the Santa Monica store. I was in and out in 20 min with the upgrade program. My appointment wasn't until 8:30 am and I was walking away at 8:20. Everything went through fine. Did a bit of filling out forms on their iPhone point of sale device, swiped my card and was on my way.

 

[0970373]

Yes, a mortgage, 3 car loans (2 paid off , 1 current). Believe me, I've been around the credit block a while and I've rebuilt my credit from my previous mistakes of my youth. It has been spotless for the past 20yrs.

OK. I was only basing my response off of information you had given. I wasn't trying to imply anything on you personally. If that is your case, it definitely seems weird. Perhaps it was the credit card co declining something? That seems to be an issue as well, aside from the actual credit check. I didn't have any issues but I also did call my CC before my appt to let them know what I was doing and that a large charge might be coming in. I used my AMEX, which doesn't have a limit but sometimes, they flag big purchases for fraud.

 

[greytmom]

Seems like perhaps Apple should have had pre-qualifying set up.

 

[Chase265]

Seeing that some of you guys were able to use Amex...but when I tried they told me they can't accept Amex and I had to use Visa/Mastercard/Discover

 

[rdlink]

Unfortunately they run it like a normal carrier upgrade - you must log in with your account details for any of the 4 carriers in the Apple store. I had trouble because my t-mobile account was not 'the right kind of account' for the IUP. The Apple Store guy said that Apple were allowed to do the IUP as part of a deal with the carriers... So this isn't wholly a way to free us up from the carriers. Perhaps when the truly SIM-free version of the iPhone is released in a few months they will allow this, but probably not.

So were you required to pay an upgrade/activation fee?

 

[Treq]

It is a proven fact that you will spend more when using a credit card vs. cash. The extra you spend could be invested and earn more than your credit card points....

I don't pay any more for my credit card than I would pay with cash. Since I pay it off in full every month, there is no interest, and I get rewards. It is essentially a 0% loan for up to 30 days. I would be a fool not use it. Same with this upgrade program. It is essentially a 0% loan for 2years. I can keep the balance of what I would have payed for the phone in an interest account and make money for those 2 years. Plus I get the bonus credit card perks for paying off the loan with my card.