Should You Buy an IPhone on Apple’s New Installment Plan?
With a $ 1,000 price tag – or more! It’s hard to imagine buying a new iPhone right away. You can set up a data plan with your phone company, but then you usually stay with that carrier for two years. In some cases, you don’t even have a phone that you pay for every month; it’s more like a lease.
Apple is now giving you the option to exclude the phone company from the deal and instead tie yourself to Apple for two years.
The company launched an installment plan program that lets you use your Apple Card online or in the Apple Store to buy an iPhone with 24 interest-free payments. If you don’t already have an Apple Card, you can apply at checkout. This is how it works:
- You choose your new iPhone and pay with your Apple Card.
- You will immediately get daily cashback at the rate of 3%, which is the norm for Apple purchases.
- Every month, an interest-free installment plan on your phone is added to the minimum Apple Card payment.
- You can track your purchase separately from other purchases in the Wallet app.
According to CNBC, if you buy before the end of the year, the company is offering a 6% refund (instead of 3%) when you buy from Apple and pay with its Apple Card.
Let’s do a little math. You want to buy the iPhone 11 Pro (256GB) for $ 1,149. The 6% refund will “save” you nearly $ 70, bringing your pre-tax price to $ 1,080.06. Then you can split this amount over two years.
That’s a significant savings from a brand that doesn’t have a lot of hosting sales. But is this really a good deal?
First, there is a problem with the Apple Card program itself. Since Apple and sponsor Goldman Sachs try to serve a wider range of consumers than some high-end credit cards, you may not get a high enough credit limit to be able to buy iPhones with Apple Card.
Then there is everything about the minimum wage. The ability to track installment payments in the Wallet app is very useful, but since the cost of the phone is added to the monthly minimum payment, you may run into even more debt.
If you make other purchases with your Apple Card and don’t pay in full each month, but a significant portion of the minimum payment goes to your phone, you may end up paying more interest on the rest of your purchases. and it takes more time to pay them off.
This is on top of your telephone payments for two consecutive years, unless you make the additional installment payments of your choice.
If you only plan to use your Apple Card for Apple-related purchases, you may not be concerned that your phone payment stays in your digital wallet. But if you’re planning on using Apple Card as your everyday credit card, those interest-free phone charges could get lost in the fray.
This article was originally published on 12/10/2019 and was updated on the same day to correct Apple’s interim money-back offer for cardholders.