How the iPhone Upgrade Program Could Damage Your Credit Score

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Last updated on April 14th, 2023

Think twice before you sign the dotted line, joining Apple’s upgrade program could result in multiple hard inquiries and cause your credit score to take a hit.  With the speculation of the iPhone 12 already underway and rumored to have highly coveted updates, more and more people are turning to Apple’s iPhone Update Program specifically in regards to buying the iPhone 11. While there’s no inherent issue with the program itself – Apple-fans need to be made aware of the ramifications it could have on their credit.

What is the iPhone Upgrade Program?

The Apple iPhone Upgrade Program allows participants to automatically upgrade to the latest iPhone after making 12 payments on their current iPhone – a convenient and potentially cost-effective way to ensure that you’re never “stuck” with last year’s model. The program features 0% financing for 24-months and no added fees, meaning you won’t be penalized a single cent for splitting up your iPhone payments rather than buying it in one lump sum. An added plus, enrolling in the program directly with the iPhone manufacturer (rather than a phone carrier), frees iPhone owners to bounce between carriers. No longer will Apple-fans be tied to a 2-year contract with a bad phone plan.

Why is the Program So Popular All of a Sudden?

Apple launched the iPhone Upgrade Program back in 2015 but have quickly become a hot topic synonymous with searches on ‘iPhone 11’. Although the program has been around for several years, the incremental changes of the last few iPhone generations have led to a resurgence of the program’s mention in the media. Influencers and tech bloggers continually insist that a future iPhone model will be the one to wait for. As such, many Apple-fans feel comforted by the iPhone Upgrade Program as a way to enjoy the moderate improvements of the newly released iPhone while forsaking the financial risk of owning what will eventually be an outdated model.

How the iPhone Upgrade Program Could Affect Your Credit

It’s easy to see how the announcement of the iPhone 11 would have consumers clamoring to join this program, but with the added temptation of opening an Apple Card to pay for it – it could cause long-standing damage to your upcoming financial goals if you require your credit card to be in tip-top shape. If you’re one of the many iPhone owners who have opted to go this route, keep in mind that joining the upgrade program is a loan through a bank (Citizens One) and not simply an I.O.U. to Apple. Per the upgrade program’s Terms & Conditions, enrolling takes more than a credit card and could result in a hard inquiry on your credit history. “The iPhone Upgrade Program is available to qualify end-user customers who finance and activate an eligible iPhone…You will be required to apply for and enter into a 24-month 0% APR installment loan” Besides the fact that a loan such as this one would have no positive impact on your credit as opening the Apple Card might, there’s also the inherent risk that accompanies all financial applications that you might not be approved. Even scarier still is that each the program could result in a hard inquiry every year that you are in the program (up the discretion of Citizens Bank should they decide they need more detailed information regarding your credit history). If you were also planning on signing up for the iPhone payment plan or the Apple Card, you’ll need to mentally brace yourself for up to two additional hard pulls on your credit. (Read more to learn whether it would be worth it to open an Apple Card to buy the new iPhone).

About: Allan
Allan Guzman Chinchilla

Allan is the Managing Editor at In addition to leading a robust team of writers in the pursuit of thorough credit cards expertise, he is an avid fan of films, food, traveling, and Star Wars.

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