Apple iPhone 7 Plus encased in the Tech 21 Evo Mesh (3 meter (9.9 feet) drop protection) connected to my MacBook Pro for a back-up restoration. (Taken with my iPhone 5.)
I traded in my Apple iPhone 6S Plus to try out the Apple iPhone Upgrade Program; hence, I got the Apple iPhone 7 Plus. Normally, I make a one-time purchase of the unlocked (SIM-free) iPhone whenever the new model comes out, and I give my old iPhone to my mum or sister as their upgrade.
Today was different. Several days ago, due to my excellent credit rating (835), Apple sent me an email inviting me to try out their upgrade program; so, I went to the Apple store and traded my iPhone 6S Plus for the iPhone 7 Plus.
Taken with the Apple iPhone 7 Plus during a meeting.
In my case, this is the way I use the Apple Upgrade Program...I am always purchasing the newest iPhone; so, with the Apple Upgrade Program, I can trade in my old iPhone...in this case, my iPhone 6S Plus, and Apple will buy my iPhone 6S Plus, and upgrade me to the new iPhone 7 Plus.
Taken with my Apple iPhone 7 Plus from my penthouse.
Apple gave me $315 for my iPhone 6S Plus, which was placed as a credit on my credit card.
Then, Apple gives me the new iPhone 7 Plus. My 0% interest monthly payment is $45.75 per month for two years, which include the Apple Care Program of $129, with the option of paying the loan off in full after six months.
So, two options are available to me... the first option is I can keep the iPhone 7 Plus by making my monthly payments for two years. I can also, after 6 months, pay the entire phone off if I wanna keep it; or, I can pay an additional 6 months and upgrade to the newest iPhone when it comes out.
For me, the latter option is my interest: I make payments and after 12 months, I can trade in my iPhone 7 Plus for a new iPhone. Apple takes all the payments I made for 12 months and takes my iPhone 7 Plus, and I get the new iPhone with a new two-year contract with Apple. The remaining 12 months from the old iPhone 7 Plus financing, doesn't get carried over to my new Apple Upgrade Program's contract.
Taken with my Apple iPhone 7 Plus.
Here is the the way the numbers work for me:
Total cost of the iPhone 7 Plus with Apple Care ($129), which is calculated into the monthly fee payments, is $1098. (Apple Care is a required purchase for the Apple Upgrade Program. It adds an additional ~$5 per month to the monthly payments.)
Citizens One is the Apple's financing company for the Apple Upgrade Program. So, they do a credit check on me; and, if approved, they provide the financing for my iPhone 7 Plus.
My monthly payment for two years, with the option to buy, is $45.75 -- 0% interest.
My first bill from Citizens One is $130.54. This amount is for a transaction fee and the first month iPhone 7 Plus payment, which is charged to my credit card. (In order to participate in the Apple Upgrade Program, you need a credit card -- not a debit card.) To me, the transaction fee makes up for Citizens One 0% interest of their financing -- in my opinion, sure they say it's, "0% financing," but Citizens One charges the transaction fee, so is it really 0% interest? Eh.
This transaction fee is off-set by the $315 that Apple gave me for my iPhone 6S Plus; and, it will pay for several months of the $45.75-monthly-payments for the iPhone 7 Plus.
Taken with my Apple iPhone 7 Plus.
After I make 12 months of payment, which in this case is $549, I can upgrade to the new iPhone when it comes out. Apple takes the $549 plus my old iPhone, which in this case is the iPhone 7 Plus, and closes out Citizens One two-year financing contract tied to the iPhone 7 Plus -- the remaining 12 months payment is NOT carried over to the new iPhone's financing contract.
Apple gives me a new iPhone and creates a brand new Citizens One two-year 0% interest financing contract for my new iPhone.
So, 12 months of monthly payments is $549. I add the $130.54 (transaction fee) to the $549, and the total payment I made for the iPhone 7 Plus is $679.54.
If I purchased the iPhone 7 Plus with Apple Care ($129), I would have to pay $1028; and, I would be stuck with an old iPhone 7 Plus when I purchase the new iPhone.
For $679.54, I get a new iPhone 7 Plus, and after 12 payments out of the 24 payments, I can get a new iPhone under a brand new Apple Upgrade Program, without any carry-over from the iPhone 7 Plus's old two-year contract.
Taken with my Apple iPhone 7 Plus with the Portrait feature -- eh -- it's okay -- the software still needs work.
In my view, the Apple Upgrade Program is win-win for all parties:
- Apple locks in customers that spend money to get the newest iPhone -- they are also taking away the upgrade business from the carriers like AT&T, Verizon, and so on;
- Citizens One makes money through their transaction fees for each new financed new iPhone; and,
- Consumers get a new iPhone at almost half the price of purchasing a new iPhone after 12 payments.