iPhone camerasSource: Rene Ritchie

If you're looking to get an iPhone directly from Apple, and don't want to pay the entire up front cost, there are now three ways to finance an iPhone through Apple. First, there's the iPhone Upgrade Program, for which the iPhone 12) lineup are the only eligible models. The second way, available to all of the iPhones currently sold by Apple, is using your Apple Card to make monthly payments (a zero-percent interest loan), which is exclusive to those that have an Apple Card. The third is the iPhone Payments plan, which is a zero-percent interest loan from Apple that makes it possible for you to buy a new iPhone without having to pay the full price upfront. Apple iPhone Payments are also open to all of Apple's currently-sold iPhones.

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The iPhone Payments plan is different from the iPhone Upgrade program in two major ways: you're not trading in your iPhone to upgrade next year, and AppleCare+ isn't included. Here's everything you need to know!

How is Apple iPhone Payments different from the iPhone Upgrade Program?

On the surface, it may seem like the iPhone Upgrade Program and the iPhone Payments plan are the same, but they're not. They are entirely different finance programs with different features and restrictions.

The iPhone Upgrade program allows you to begin a sort-of leasing program with Apple, wherein you can trade in your current iPhone and upgrade to a new one in as early as six months with fees, or one year without additional fees. If, after two years, you want to upgrade, you can, but you don't have to trade in the iPhone you've been using on the iUP, it's yours to keep. Also of note: so far, the iPhone Upgrade Program has only been open to Apple's very latest iPhone models, which currently means the iPhone 12.

With the iPhone Payments plan, you're simply taking out a two-year loan on an iPhone with a carrier plan, and the loan is done through Apple's financial collaborator, Citizens One, the same institution that finances the iPhone Upgrade Program. You won't be able to trade it in for an upgrade after one year. You have to pay the full loan (though you could pay the loan off early if you wanted to).

On the iPhone Upgrade Program, AppleCare+ is folded into the cost, so your monthly payments are slightly higher, though you're not paying any fees. It's just the cost of an iPhone with AppleCare+ divided by 24 months.

On the iPhone Payments plan, you don't have to buy AppleCare+. In fact, if you want it, you have to purchase it separately, which you can do on installments now.

If you just want an iPhone, and don't need AppleCare+ and don't plan to upgrade every year, or even have a plan for future iPhone upgrading, the iPhone Payments plan will work for you.

One final note: the iPhone SE (2020), iPhone 11, and iPhone XR are not eligible for the iPhone Upgrade Program, so if that's the phone you're buying, the iPhone Payments Plan is what you want.

So I can't upgrade every year on the iPhone Payments plan?

Correct. The iPhone Payments plan is a loan financing program that lets you make monthly payments across 24 months on an iPhone. Even if you get rid of the iPhone a year or the day after you've made your final payment, you must pay the full amount (though you can pay the loan off early).

Do I have to get AppleCare+ with it?

Nope! One complaint I heard from some people interested in the iPhone Upgrade Program is that they're forced to have AppleCare+, but with the iPhone Payments plan, you don't have to.

In fact, if you want it, you have to purchase it separately from your loan. You can, however, make monthly payments for AppleCare+ now.

What is the interest rate?

Zero percent financing, my friend. That's right. You won't pay more than the actual cost of the iPhone plus taxes (through Apple), as if you were paying for it with cash upfront.

Can I use my Apple Card as a payment option?

You sure can. Once you're approved for the loan, you can use your Apple Card as your monthly payment option, which gives you that sweet 3% cashback reward every time you make a payment.

Will there be a hard credit pull?

Apple' states that "a credit check is required," but doesn't give a lot of detail as to whether it's a soft or hard pull on your credit report. If it's anything like the iPhone Upgrade Program, however, it'll be a soft pull until Citizens One determines it needs a deeper credit check.

A note about credit freezes

If you've put a credit freeze on your credit report, there are a few things you should know about applying for your iPhone Payments loan.

A credit freeze is a way for you to restrict access to your credit report to protect you from identity theft. If you've put a freeze on your credit report, it doesn't affect your credit score or keep you from being able to apply for loans. There are some caveats though.

When applying for a loan through the iPhone Payments plan for the first time, you can allow Citizens One run a credit check, but you'll want to first temporarily lift the freeze specifically for the credit report agency Citizen One will request your report from (either Equifax, Experian, or TransUnion).

You can request a credit freeze lift for a specific amount of time or for a specific agency, in this case, Citizens One Bank.

To find out which agency Citizens One will request your report from, call them at 1-888-201-6306. If you are unable to get this information, you can temporarily lift the freeze for all three agencies.

Here are the numbers for the U.S. credit report agencies:

  • Equifax — 1-800-349-9960
  • Experian — 1‑888‑397‑3742
  • TransUnion — 1-888-909-8872

You'll need to provide your name, address, date of birth, Social Security number and some other personal information.

Who is eligible?

Currently, the iPhone Payments loan program is only available to U.S. residents over the age of 18.

You'll also need a valid U.S.-issued credit or debit card in order to enroll.

Can I buy an iPhone for someone else on the iPhone Payments plan?

You can buy the iPhone for anyone you want, but you're the one responsible for payments. If you want to get your kid or spouse the new iPhone, go for it! Just remember that you're the one Citizens One will contact if the payments are late. It's just like any loan.

What do I need to apply for the iPhone Payments program

As mentioned above, you must be a U.S. resident over the age of 18 and you must have a valid U.S.-issued credit or debit card. Pre-paid cards are not accepted.

You'll also need to make sure to temporarily unfreeze your credit report if you've frozen it.

When you apply, you'll need to choose a carrier. If you already have a carrier account and want to add your new iPhone to the plan, you'll need your carrier account information, including your account PIN if you're with Verizon, so that Apple can confirm your eligibility.

If you don't have it memorized, you should also have your social security number on hand for the credit approval process. You'll be asked to provide some information about yourself, such as your address, phone number, and annual income.

Do I have to pay anything upfront?

Your first installment will include the first payment for the phone, plus all applicable taxes and fees. Your first installment will be processed on the day you buy your new iPhone.

Can I pay off my loan early?

Though payments are automatically charged on a monthly basis, just like any loan, you can pay multiple payments in a single month or pay the entire amount off early. You'll need to contact Citizens Bank directly to find out how to pay multiple payments or pay off your loan entirely.

Can I get a SIM-free iPhone?

Unfortunately not. The iPhone Payments plan is Apple's financing option for buying an iPhone with a carrier plan. You'll be buying an unlocked iPhone (the only locked iPhone that you can purchase through Apple right now is on the AT&T Installment plan), but you will be required to select a carrier plan to use for the next two years.

Is the cost of the carrier plan included in the loan installment?

No. The iPhone Payments plan only covers the cost of the iPhone. You'll pay for the carrier service separately and directly through your carrier.

What if I want to cancel or switch my carrier service plan?

If you decide, within the 24 months, that you want to switch carriers, you can't take your iPhone Payments loan with you. You'll have to pay the full balance of the loan in order to get out of your carrier plan.

So choose wisely, my young Padawan.

Can I trade in an old iPhone?

You sure can! You can trade in a phone as old as the iPhone SE for up to $30 off, all the way up to the iPhone 11 Pro Max for up to $500 off

Trade-in values for your old iPhone

  • iPhone SE (First generation): Up to $30
  • iPhone SE (Second generation): Up to $210
  • iPhone 6: Up to $30
  • iPhone 6 Plus: Up to $50
  • iPhone 6s: Up to $60
  • iPhone 6s Plus: Up to $80
  • iPhone 7: Up to $100
  • iPhone 7 Plus: Up to $140
  • iPhone 8: Up to $140
  • iPhone 8 Plus: Up to $210
  • iPhone X: Up to $250
  • iPhone XR: Up to $250
  • iPhone XS: Up to $300
  • iPhone XS Max: Up to $370
  • iPhone 11: Up to $350
  • iPhone 11 Pro: Up to $450
  • iPhone 11 Pro Max: Up to $500

Can I have more than one loan on the iPhone Payments plan at the same time?

Only with different phone numbers. You can't apply, for example, for two iPhone Payments loans with your single Verizon account using the same phone number. You can apply for two different loans using two different numbers on the same carrier plan, though. If, for example, you're on a family plan.

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 iPhone Payments 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.

What if my loan isn't approved?

Citizens One Bank may decline your loan request for any reason. If that happens, the Bank may send you a letter detailing the reasons why. You can also call Citizens One at 1-888-201-6306 for questions about your loan or decline of one.

Any more questions?

Please let us know what questions you have about the iPhone Payments plan and we'll find the answer and drop it into this FAQ as soon as possible.