Is a credit check required for the new iPhone Upgrade Program?

[fanta88]

I hope that's the case. It would look really bad to have a bunch of disgruntled customers in the store and I feel sorry for the store employees who would have to deal with explaining any program rejections.

Not to mention I'm sure the forums here would just blow up with people venting about the program haha.

 

[Makendu]

Hey all, I was wondering if a credit check is going to be required for the new upgrade program. I currently have no credit and I haven't seen any one mention this. Thanks!

you probably do my mom had to get one when she got her iPhone 6

 

[tigerfan41]

I hope that's the case. It would look really bad to have a bunch of disgruntled customers in the store and I feel sorry for the store employees who would have to deal with explaining any program rejections.

Not to mention I'm sure the forums here would just blow up with people venting about the program haha.

No kidding! I'm guessing because they ask for a credit card for the payments up front, it's more similar to HSN/QVC Easy Pay where they charge your monthly payment to your card every month.

For me, it's not a huge deal. Either I get approved or I don't and I wait a few months to purchase the phone outright. Others won't be as patient, though.

 

[bradl]

Since my credit history isn't perfect (stupid college spending mistakes!) I wondered about the credit check. The Apple rep I spoke with assured me that it is a basic credit check, that there's no "set" credit score for approval, and that yes, you do need a credit card and not a debit card.

I assume that unless your credit is completely horrible, you'll be approved. It's similar to Verizon's Edge program--as long as you haven't had your service suspended in the last six months, you're approved.

The housing bubble and college mistakes killed mine. Thankfully, with the bank issue as well as the housing issue completely souring my relationship with the bank, I switched my accounts to my credit union. They offered a secured credit card, which would qualify for this. BTW: If you have the ability to do the same (even with a Capital One card), and make payments that show a trend of at least 50% positive in paying down your bill (to show that you are actually paying off the bill), your credit score should start to go up.

But if you do that, even with a secured card, you are showing an open line of credit, which would qualify for proof of that personal credit card. However, you'd have to hurry if you want to have it in hand by the time your pre-ordered iPhone comes in.

BL.

 

[tigerfan41]

^ Good points! I've already started my rebuilding process, so I have a couple of unsecured credit cards at my disposal. Capital One is great for taking a chance on those who want to start over.

Secured credit cards are great for rebuilding and would indeed be usable for the iPhone upgrade program.

 

[JPIndustrie]

I'm hearing a lot of conflicting things regarding the program...

Researching i found this : http://money.cnn.com/2015/01/22/technology/mobile/tmobile-credit/

says 50% of applicants don't qualify for their greatest EIP deals...

However, from other comments I read people say they aren't in the business not selling phones and will offer some deposit type approach to allow those with less than perfect credit sign up.

Personally I already have my pre-order in for a 6S to be shipped to my house and I have an appointment set up day of - my plan is to settle this once and for all. If all else fails - I have a contract-free 6S at the end of the day.

 

[Noecuhh]

I spoke with someone from Apple yesterday and she told me something I am having a major problem believing. She said that it's not really a credit check like a normal one. You make an appointment (I don't remember if this is when you pick up the phone or not) with the credit or debit card you plan to use. They check to make sure that you have enough funds on that card to pay 3 installments. If you do, you are fine. That's it. I'm going to call today and speak with someone else because again I'm not believing this.

I was told the same thing!

 

[Newtons Apple]

No doubt it will be a hard pull credit inquiry and result in automatically charging your credit card each month. Plus if you do not pay, I am betting Apple can turn your phone into a pretty brick!

 

[rockyroad55]

That's what I have a hard time believing too. It's financed as a loan through citizens bank not Apple.

 

[Rob198612]

I have T-Mobile EPP and they have the same fine print (i.e. qualified customer only). I got approved but NEVER see a hard pull on my credit report. I don't know how T-Mobile do it, but do you think the Apple Plan will do the same?

I just don't want to see a hard pull on my credit report...

This is something I learned not to long ago carriers don't use the 3 major credit companies they use a different report that is based on utilities etc..

 

[kevink2]

I have T-Mobile EPP and they have the same fine print (i.e. qualified customer only). I got approved but NEVER see a hard pull on my credit report. I don't know how T-Mobile do it, but do you think the Apple Plan will do the same?

I just don't want to see a hard pull on my credit report...

Did you check all 3 major credit reports?

 

[striders]

Did you check all 3 major credit reports?

Yes, I have 2 credit monitoring plus check my credit from annualcreditreport.com every year.

If there's a hard pull from T-mobile, it'll stay for 2 years in my CR.

 

[evorc]

Yes you will be financing with Citizens bank not Apple.

 

[MikeNM]

Yes you will be financing with Citizens bank not Apple.

It's listed as a 0% interest loan, though, so Apple has to be involved in making it worthwhile for them.

They're obviously doing some sort of check of one's ability to pay, but that doesn't mean that it's a traditional FICO score check. Since they're requiring it to be put on a credit card, I'm assuming that that's the primary way that they're limiting their risk.

 

[CNeufeld]

We don't have the Apple upgrade option here, but some of the providers offer something similar. Has anyone done the math to show this is a good deal or not? Or is it just an easier way to handle things, compared to having to sell the phone on your own at the end of a year?

C

 

[Applejuiced]

Why wouldn't it depend on your credit?
Everything you do nowadays is based on credit.
You think they will just hand anyone a $1000 device and walk away hoping you'll make the payments for the next 24 months?
Credit is very important, build it up and treat it with caution and care and you will get rewarded for credit worthiness.
If you're not financially responsible then you will have problems and things will cost you more and be harder in your future because of bad past decisions.

 

[MikeNM]

Why wouldn't it depend on your credit?
Everything you do nowadays is based on credit.
You think they will just hand anyone a $1000 device and walk away hoping you'll make the payments for the next 24 months?
Credit is very important, build it up and treat it with caution and care and you will get rewarded for credit worthiness.
If you're not financially responsible then you will have problems and things will cost you more and be harder in your future because of bad past decisions.

Most people would consider having no debt and high savings to be financially responsible, and yet it doesn't necessarily result in a good credit score. A young person might not have gotten a credit card because he or she lives frugally and doesn't need one... That could result in having no credit score.

And Apple isn't creating a no interest financing program to be charitable... They're doing it to try to lock you into buying two expensive phones from them. Obviously it doesn't help them if you never pay, but it doesn't behoove them to be pickier than necessary.

 

[uwdude]

I wonder how Citizens Bank is making money off of this. Why would they offer it if it's 0% interest. Is Apple giving them a cut of each sale? Or maybe they're thinking of it as marketing, new people to market checking and savings accounts to, trying to get new customers.

 

[DoofenshmirtzEI]

I wonder how Citizens Bank is making money off of this. Why would they offer it if it's 0% interest. Is Apple giving them a cut of each sale? Or maybe they're thinking of it as marketing, new people to market checking and savings accounts to, trying to get new customers.

The same way car manufacturers offer 0% interest, they subsidize the loan. With interest rates super low right now, it's very easy for vendors to offer 0% interest and not have to pay much to subsidize the loan.

 

[Applejuiced]

Most people would consider having no debt and high savings to be financially responsible, and yet it doesn't necessarily result in a good credit score. A young person might not have gotten a credit card because he or she lives frugally and doesn't need one... That could result in having no credit score.

And Apple isn't creating a no interest financing program to be charitable... They're doing it to try to lock you into buying two expensive phones from them. Obviously it doesn't help them if you never pay, but it doesn't behoove them to be pickier than necessary.

I don't think the finance company cares if a young person lives frugally and has no credit to finance a 2 year phone purchase.
If they are not picky then they will have to eat the loss. Common sense right?

I wonder how Citizens Bank is making money off of this. Why would they offer it if it's 0% interest. Is Apple giving them a cut of each sale? Or maybe they're thinking of it as marketing, new people to market checking and savings accounts to, trying to get new customers.

Trust me, they're not doing it for free obviously.
They're making a profit by the financing. Nothing to do with opening checking or savings accounts.

 

[snsking]

I wonder how Citizens Bank is making money off of this. Why would they offer it if it's 0% interest. Is Apple giving them a cut of each sale? Or maybe they're thinking of it as marketing, new people to market checking and savings accounts to, trying to get new customers.

I hope you realize that not everyone who finances something will pay it off in time. The banks count on people who miss payments/make minimum payments/etc, then they hit you with fees and interest. I think thats where most of the money is made.

At the end of the day if you pay your full balance you have nothing to worry about.

 

[uwdude]

I hope you realize that not everyone who finances something will pay it off in time. The banks count on people who miss payments/make minimum payments/etc, then they hit you with fees and interest. I think thats where most of the money is made.

At the end of the day if you pay your full balance you have nothing to worry about.

That's true, I forgot all those documentaries I have watched about how the banks make the most profit off of subprime lending. It's very sad. And guess who funds or in some cases owns all those payday loan places- that's right the big banks.

 

[edlex]

I wonder how Citizens Bank is making money off of this. Why would they offer it if it's 0% interest. Is Apple giving them a cut of each sale? Or maybe they're thinking of it as marketing, new people to market checking and savings accounts to, trying to get new customers.

They are definitely getting a fee for every phone they finance. Most probably a much better more profitable deal for Apple than dealing with the carriers.

 

[snsking]

That's true, I forgot all those documentaries I have watched about how the banks make the most profit off of subprime lending. It's very sad. And guess who funds or in some cases owns all those payday loan places- that's right the big banks.

Yupp exactly. But for what it's worth, for them to want to finance phones for 2 years really shows you that theres a place for money to be earned on their side. Ill stick to my 2 year contracts

 

[DoofenshmirtzEI]

Yupp exactly. But for what it's worth, for them to want to finance phones for 2 years really shows you that theres a place for money to be earned on their side. Ill stick to my 2 year contracts

It's not the financing that is the ka-ching (they're taking a loss there), it's the trade-in business that's lucrative. That's why they're hyping it up as a "way to get a phone every year". And if someone does keep it two years? They sold an AppleCare contract, fully paid. Money, hunny, both ways.