Buzz
With prices starting at $1,000 or more, purchasing a new iPhone outright can feel nearly impossible. While a carrier payment plan could be an alternative, it often ties you to that provider for two years. In some instances, you may not even own the phone you’re paying for monthly; it’s more like a lease.
Now Apple gives you the opportunity to bypass the carrier and commit directly to Apple for two years instead.
Apple has introduced an installment program allowing you to purchase an iPhone in 24 interest-free payments using your Apple Card, either online or in-store. If you don't already have an Apple Card, you can apply during checkout. Here’s how it works:
Select your new iPhone and pay using your Apple Card.
You'll receive 3% Daily Cash back, which is standard for Apple purchases, right away.
Each month, the payment for your phone, with no interest, is added to your minimum Apple Card payment.
Track your installment payments separately from your other purchases directly in the Wallet app.
If you make your purchase before the year ends, the company is offering 6% cash back (instead of 3%) when you buy from Apple and pay with your Apple Card, according to CNBC.
Let’s do some quick math. Suppose you're purchasing an iPhone 11 Pro (256 GB) for $1,149. A 6% cash-back would 'save' you nearly $70, lowering your pre-tax price to $1,080.06. You can then break down this amount into monthly installments over two years.
It’s a substantial saving from a brand known for rarely holding sales. But, is it really such a great deal?
First, there’s the issue of the Apple Card program itself. Since Apple and its card partner Goldman Sachs aim to reach a broader customer base than some exclusive credit cards, you may not have a high enough credit limit to purchase an iPhone with your Apple Card.
Then there’s the matter of the minimum payment. While being able to track your installment payments in the Wallet app is convenient, since the cost of your phone is added to your monthly minimum payment, you might find yourself accruing more debt.
If you’re making other purchases on your Apple Card and aren’t paying them off fully each month, but a large portion of your minimum payment goes toward your phone installment, you might end up paying more interest on the remaining balance and take longer to pay off your purchases.
This is in addition to having two full years of phone payments unless you decide to make extra payments on the installment plan on your own.
If you intend to use your Apple Card only for Apple-related purchases, you might not mind having your phone payment stuck in your digital wallet. But if you plan to use the Apple Card for everyday spending, those interest-free phone payments could get lost among your other purchases.
