Apple Card users can now buy an iPhone in installments with no interest

GP: Tim Cook at Apple Card launch 190325

Starting on Tuesday, people who have an Apple Card can buy an iPhone in 24 monthly installments without paying interest.

Under the program, monthly payments for a new iPhone from the Apple Store will get bundled into the minimum Apple Card payment in the iPhone’s Wallet app, Apple said. Apple also announced that it will offer a 6% discount on purchases at its retail stores until the end of December while using the Apple Card, a holiday promotion that is twice the usual discount.

The announcements suggest the card is not only a way for Apple to experiment with offering financial services (along with its bank partner, Goldman Sachs), but can also help Apple drive sales through discounts and new options to pay for Apple products — particularly ways to buy Apple hardware with recurring billing, instead of one-off purchases.

Apple on the company’s earnings call in October announced zero-interest installments.

“One of the things we are doing is trying to make it simpler and simpler for people to get on these sort of monthly financing kind of things. That’s a part of what we announced with the Apple Card earlier in the call and so we are cognizant that there are lots of users out there that want sort of a recurring payment like that,” Apple CEO Tim Cook said at the time.

“Installments are not subject to interest like other purchases made with Apple Card. If you pay more toward your installment balance, you may reduce the overall number of payments, but are still scheduled to pay your installment payment the following month,” according to a notice posted on Monday inside the Wallet App.

Apple offers other ways to buy iPhones on monthly installments, including an upgrade program that bundles Apple’s AppleCare warranty and up-to-date hardware. For example, a current iPhone 11 Pro model starts at $41.62 per month. A previous Apple-branded credit card included special financing at Apple stores.

Apple also announced Tuesday that Apple Card customers can get 6% cash back on purchases of Apple products through December 31. Normally, Apple Card customers get 3% cash back on Apple purchases.

The Apple Card was launched in August. Apple’s bank partner, Goldman Sachs, handles the back-end and credit parts of the product. Users apply for the card through the Wallet app on iPhones, which also contains the credit card’s fine print and transaction history.