iPhone SE 2020Source: Apple

Apple is making it easier and easier for people with all different financial backgrounds to get an iPhone. You can buy one outright, make monthly payments using the iPhone Payments plan, get a new one every year on the iPhone Upgrade Program, and now you can buy one on credit with your Apple Credit card. Here's how it works and what you'll need to know to buy an iPhone with Apple Card Monthly Installments.

What exactly are Apple Card Monthly Installments?

Apple Card Monthly Installments is an interest-free way to buy your new iPhone with payments that are spread out over two years. If you have an Apple Card, or plan on applying for one, you can finance your iPhone with Goldman Sachs. A set dollar amount (depending on which iPhone you buy) will be charged to your Apple Card each month.

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There's no application to fill out, no pre-approval necessary. If you have an Apple Card and your credit is in good standing with Goldman Sachs, you're good to go. All you have to do is select Apple Card Monthly Installments when buying your new iPhone.

How is this different from the iPhone Payments Plan?

The biggest difference between the two is that you have to be approved for the iPhone Payments Plan but you're already approved if you have an Apple Card. There are a couple of additional differences, too.

With iPhone Payments, you are taking out a loan from Citizens Bank. The Bank will run a credit check on you (a soft pull) to determine your eligibility.

With Apple Card Monthly Installments, you are promising to pay for the total cost of the iPhone by paying your credit card bill each month. If you buy the most expensive iPhone at, say, $60 per month, but only pay $30 a couple of those months, you won't get in trouble.

When you apply for an iPhone Payments loan you are required to select a carrier, though you will still be getting an unlocked phone. If you select Apple Card Monthly Installments as your payment method, you can buy a SIM-free iPhone, instead. You are also not locked into a specific carrier for two years. You can switch to a different carrier at any time.

Which iPhones are eligible for Apple Card Monthly Installments?

The 2020 iPhone lineup includes:

  • iPhone SE (2020)
  • iPhone 11 Pro and Pro Max
  • iPhone 11
  • iPhone XR

You can pick any of these phones SIM-free or with AT&T, Sprint, T-Mobile, or Verizon as your carrier.

What about iPads? Macs?

At this time, iPhones are the only devices eligible for Apple Card Monthly Installments.

I heard I can get the 3% cashback all upfront

You heard correctly. When you purchase your iPhone using Apple Card Monthly Installments, 3% of the total amount off your purchase is sent to your Daily Cash balance right away.

Of course, just like anything you purchase, that 3% is subject to any changes you make. If you return the iPhone, you'll lose that cashback reward.

Can I buy a SIM-free iPhone?

You can! That's one of the things that makes this particular payment plan so interesting. You can either buy your iPhone SIM-free or pick a carrier option when you purchase.

Can I switch carriers while still paying my Apple Card Monthly Installments?

Absolutely. Though you may pick a carrier when you first buy your iPhone on the Apple Card Monthly Installment plan, you're not required to stick with that same carrier for the two years you're paying off the iPhone. It's similar to buying an iPhone outright, except that you don't have to drop all that money upfront.

Do I have to be approved for Apple Card Monthly Installments?

Only if you're applying for an Apple Card. If you already have an Apple Card, there is no application and no approval process.

With that in mind, your credit must be in good standing with Goldman Sachs. If you have a history of missed payments or you've overextended your credit line, you may not be able to use Apple Card Monthly Installments.

What if my Apple Card credit line is too low to buy the new iPhone?

Remember, you're not buying the iPhone at full price outright on your Apple Card. You're making monthly payments, which range from about $17 for the iPhone SE up to about $60 per month for an iPhone 11 Pro Max with the highest storage capacity.

If your Apple Card balance can't support even a $60 per month charge, you probably shouldn't be buying a new phone right now anyway.

What is the interest rate?

The interest rate on the Apple Card Monthly Installments plan is 0%. Keep in mind, however, that your Apple Card has its own interest rate. If you pay off the balance every month, you'll never pay interest. If you carry a balance from one month to the next, you'll have to pay whatever your Apple Card interest rate is.

Will there be a hard credit pull?

There is no credit approval process unless you are applying for an Apple Card. If you are applying for an Apple Card, you will be subject to the standard credit approval process.

Who is eligible?

Anyone with an Apple Card. Apple Card is available to qualified applicants in the U.S. that are 18 years of age or older.

Can I trade in an old iPhone?

You can. Trading in an old iPhone can lower the cost of your new iPhone which, in turn, lowers your monthly charge.

Trade-in values for your old iPhone are as follows:

  • iPhone SE - Up to $30
  • iPhone 6 - Up to $30
  • iPhone 6 Plus - Up to $50
  • iPhone 6s - Up to $80
  • iPhone 6s Plus - Up to $100
  • iPhone 7 - Up to $120
  • iPhone 7 Plus - Up to $250
  • iPhone 8 - Up to $170
  • iPhone 8 Plus - Up to $250
  • iPhone X - Up to $320
  • iPhone XR - Up to $300
  • iPhone XS - Up to $420
  • iPhone XS Max - Up to $500

What if I'm already on the iPhone Upgrade Program?

You can't transfer the payment of the iPhone on your iPhone Upgrade Program plan to the Apple Card Monthly Installments Plan. If you're in the middle of your 24-month contract on the iPhone Upgrade Program, I recommend you finish off the program unless you're willing to either pay off what you owe for the iPhone on the iPhone Upgrade Program in its entirety or carry two different installment plans at the same time (one for the iPhone Upgrade Program and one for the iPhone Payments plan). The latter would mean you'd have two phones.

Any more questions?

If you have any additional questions about how Apple Card Monthly Installments work, please put them in the comments and we'll find the answer and add it to this FAQ for you.

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