Apple Card’s interest-free iPhone installment plan goes live, now with 6% back on Apple holiday purchases

Apple is today launching a new feature for Apple Card which allows cardholders to purchase a new iPhone then pay it back over 24 months with no interest. The company announced its plans for the program during its October earnings call, but now the program is actually opening up to all Apple Card customers. In addition, Apple is sweetening the deal for purchases made in December. Instead of the usual 3% back on Apple purchases, the company is offering 6% back on all Apple purchases made from December 10 through December 31, 2019.

This includes purchases made at Apple Stores, on or through the Apple Store app.

Apple already offered customers a way to pay for their iPhone purchases interest-free through its existing iPhone Upgrade Program. That program required a 24-month installment loan from Citizens One, but could still charge other fees — like those on late payments, for example.

The new iPhone installment program is a first-party offering with all the advantages that entails, including the 3% or 6% back — depending on when the purchase is made — as well as the ability to manage payments directly within the Apple Wallet app on the iPhone.

Apple says the monthly installment payments will be automatically added to the cardholder’s minimum payment, so customers only have one payment to make per month. The percentage back is added to users’ Apple Cash, and this can then be put toward the payment or spent through Apple Pay.

The iPhone installment program lays the groundwork for what could grow to become a larger subscription offering in the future. At a later date, Apple could choose to layer in its other subscriptions along with the iPhone purchase to create a bundle of some sort. By doing so, customers could buy the iPhone and the services they wanted to go along with it — like iCloud, Apple Music, Apple TV+, Apple News+ or Apple Arcade.

Already, the iPhone installment program will allow customers to bundle in AppleCare over the 24-month period.

Apple is also experimenting with other subscription bundles on a smaller scale, as it recently announced a bundle for students that offers both Apple Music and Apple TV+ for the price of a music subscription alone ($5/mo).

The installment program won’t replace the existing Apple Upgrade program, as that will remain available for non-Apple Card users. However, Apple Card owners will likely choose the first-party program the next time they want to upgrade for all its obvious advantages.

Though the installment program was pre-announced this fall, Apple CEO Tim Cook hadn’t offered a time frame for the program’s availability when he introduced the offering. Instead, he said only that it would arrive sometime later this year. But details about the program were recently added to the Apple Wallet app, which hinted that the launch was nearing.

More details about how the program works are available here: