Money at 30: How to Finance a New iPhone with Apple Card

Recently, Apple sounded the alarm and built up hype as it stealthily revealed the debut of a new iPhone. Well, a new-ish iPhone. Yes, those waiting for the latest and greatest will have to hold on for at least a few more months as this particular announcement brought a budget edition phone instead. Dubbed the iPhone SE — or the second-generation iPhone SE, technically — this new smartphone features the latest Apple A13 chip housed in an iPhone 8’s body, making it an affordable and potentially nostalgic upgrade for those who don’t mind the older style.

For me, the launch of the new iPhone SE not only gave me the ability to upgrade, while still holding on to my beloved Touch ID and small form factor for a few more years, but also provided me the opportunity to try out another feature of the Apple Card introducing last year: 24-month interest-free financing. Even with the SE fetching a reasonable $399 (or $449 for a 128GB model I opted for), the ability to spread this amount over two years without paying anything extra seemed attractive given the current conditions. Plus, it means I had something else to review — and that’s always a win for me!

With that, let’s take a look at my experience utilizing Apple Card Monthly Installments and what I think you should know about this option.

Setting up your financing

When I went to purchase my iPhone SE and try out Apple Card Monthly Installments, I found myself getting a bit confused by Apple’s website. After selecting the model, color, storage size, carrier, and the rest, it offered two payment options: Apple iPhone Payments or One-Time Payment. Under the Apple iPhone Payments, it noted that this would allow you to “pay for your iPhone with low monthly payments.” Meanwhile, the One-Time Payment option is where it mentioned that Apple Card users could earn 3% Daily Cash. Making things even more confusing, after selecting One-Time Payment, a subsequent box stated “Get 3% Daily Cash with Apple Card, or get special financing” — which sounds like a choice between the two, even though the Apple Card Monthly Installments page makes it clear that financed iPhones still qualify for Daily Cash. Frustrated by the desktop site, I decided to try the mobile version instead, but came across the same issue.

While I’m still not clear on the correct procedure from the website, what I did find was that the easiest way to ensure that you’re properly purchasing your iPhone with interest-free financing and earning 3% Daily Cash is to use the Apple Store app instead. Sure enough, with this route, there was a clear option to pay with my Apple Card while opting into the Monthly Installments program. Right away, it was clear what my monthly payments would be. Then, after a few other standard steps, I was just required to pay the taxes on my phone (which I also put on my Apple Card), while the base amount was properly financed.

By the way, if you don’t already have an Apple Card, you can apply via Wallet or you can apparently apply when checking out (as long as you’re buying while on your iPhone).

Earning Daily Cash

As I alluded to, one great perk of using your Apple Card to finance a new iPhone is that you’ll earn 3% Daily Cash on your purchase. What’s more, this will be issued in a lump sum upfront — meaning you won’t need to wait two years to take advantage of the cash back. That said, this bonus is unlikely to hit your account right away. In my experience, it wasn’t until my phone officially shipped that the Daily Cash was issued.

Considering that Daily Cash is typically a bit delayed anyway, this isn’t too big of a change but it is worth noting just in case you were already mentally spending that kickback cash.

Your credit limit

Something important to note is that, while your financed amount won’t display as part of your current Card Balance in Wallet, it will be reflected in your available credit amount. For example, with a total $8,500 Credit Limit, $449 Installment Balance, and $135.90 in New Spending, my Available Credit is currently $7,915.10. Moreover, tapping the Card Balance button in Wallet reveals that my Total Balance is $584.90. While I have yet to confirm as much, I’d suspect that this is the figure that will be reported to credit bureaus and, thus, could impact your credit utilization. That’s something to be aware of as carrying a high utilization (more than 30% of your limit) on your Apple Card could negatively impact your credit scores.

Speaking of credit limits, you may be asking yourself, “What if my Apple Card limit isn’t enough to cover the price of the phone I want?” Well, Apple actually has a section of their Support page dedicated to this question… but the answer is unlikely to thrill you. Instead of offering to extend your credit or reevaluate you, they advise that you can select a device that costs less (seriously, that’s pretty much what it says). Alternatively, they suggest trying out Apple’s Trade-In program to help bring down the cost of your phone and hopefully help it to fit your limit. That said, once again, it’s worth considering how maxing out your card could affect your credit scores.

Managing your payment plan

Like I just mentioned above, your installment plan won’t automatically display when you view your Apple Card dashboard in Wallet. However, if you tap the three dots in the upper right corner, you should see a section for Monthly Installment with a number next to it (‘1’ in my case since I only have one active financing). Then, tapping that entry will launch a new mini-dashboard showing the phone you purchased, the total amount financed, your remaining balance, and more. You can also use this dashboard to make additional payments or pay off your installment loan early.

On the topic of payments, what’s nice about the Apple Card Monthly Installments plan is that the amount you owe will be lumped into your standard Apple Card payment. That way, you don’t have to worry about making a separate payment or possibly even forgetting to do so. Per the Apple Card’s standard billing cycle, these payments will be due on the last day of the month.


Despite the slightly frustrating and confusing start to my iPhone-buying adventure, overall, I’ve been impressed with the Apple Card Monthly Installments program. Beyond the 3% Daily Cash perk that helped make my decision to apply for the Apple Card in the first place, the interest-free aspect of this offer makes upgrading much easier. At the same time, I’d still advise those considering a new phone to pay attention to how much they’re actually spending and refrain from buying a new device just because they can technically afford it — this goes double for those who might be near maxing-out their Apple Cards with a new phone purchase. But, if it is time for a new iPhone and you see other benefits in the Apple Card, the Apple Card Monthly Installments program may make a lot of sense.


Also published on Medium.

Author

Kyle Burbank

Kyle is a freelance writer and author whose first book, "The E-Ticket Life" is now available on Amazon. In addition to his weekly "Money at 30" column on Dyer News, he is also the editorial director and a writer for the Disney fan site LaughingPlace.com and has recently starting publsihing his own personal finance blog at https://moneyat30.com/

Other Articles by Kyle Burbank

Money at 30: Good (and Bad) Habits I've Gained Since Getting a Dog

It's now been six weeks since my wife and I brought home our dog, Rigby. With this being the first pet either of us has had in our adult lives, I'm sure you can understand that this addition of a dog to our family has brought about a number of changes — which is why I've already penned a number of articles on the topic (including chronicling some of the...

Lemonade Pet Insurance Review: Policy Options & What's Covered

Pets have always been an important part of many American families. Yet, I don’t think I’d ever really considered the idea of purchasing insurance for a dog or cat until I learned that Lemonade was adding such an option. Cut to a mere month ago when my wife and I added a dog (we named her Rigby) to our family and now I’ve had a chance to take a closer...

Money at 30: Why We Continue to Subscribe to a Meal Kit Service

It's officially been over a year since my wife and I decided to sign up for a meal kit delivery service. At the time, I figured I'd take advantage of the free meals being offered as part of their intro deal, add a few recipes to our collection for future use, and (of course) get a review out of the whole thing. Yet, here we are months later and we're...

With this apple’s move, It makes it easier for consumers to finance thier perchases with apple.

Thanks for the info and the clarification how this works works between the app and their website.

Comments are closed.