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Phones

Apple iPhone upgrade program: Here's how it works

Get a new iPhone every year.

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New iPhone models are on the way -- read about the iPhone 8, iPhone 8 Plus and iPhone X here -- so it's a good time to review the iPhone Upgrade Program Apple introduced two years ago. 

When phone carriers began ditching two-year contracts and the subsidized-but-still-sizable up-front charges of a new phone and started to let customers finance their phones for a set installment each month, Apple jumped into the game of selling iPhones without contracts. The program lets you upgrade to a new iPhone every year. Let us review.

How does the iPhone Upgrade Program work?

You buy an iPhone from Apple -- from an Apple Store in person, Apple's online store or the Apple Store app -- and agree to pay off it off over 24 months. But after making half of those payments, you are eligible for a free upgrade. After 12 months, you can trade in your current phone for a new model and start the clock again on the 24 months of payments and eligibility to upgrade after making 12 of them.

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Why buy from Apple instead of a carrier?

Apple sweetens the deal by throwing in AppleCare+ coverage, its insurance and extended warranty program that would otherwise cost $129. You might pay a few dollars more per month for Apple's upgrade program than for a similar installment plan from a carrier, but you miss out on AppleCare+.

AppleCare+ doubles the standard one-year warranty to two years, but that's less of a concern if you are planning on trading in your phone after the first year. The real value of AppleCare+ is getting accidental-damage protection. You get two accident claims that'll replace your phone (each carries a $99 charge, but that's cheaper than buying a new phone). You'll also be able to replace a cracked screen for $29. Phone support is also extended to two years with AppleCare+, up from the standard 90 days.

How much does it cost?

Pricing ranges from $34.50 a month for the 64GB iPhone 8 ($500 at Cricket Wireless) to $56.16 a month for the 256GB iPhone X.

apple-iphone-upgrade-program-2017

Apple

How do I pay?

You'll need a credit card to sign up, at least in the US. Last year I ran down to my local Apple Store to get the new iPhone 7 Plus ($751 at Amazon Marketplace) and was told my debit card wasn't going to cut it. In the US, Apple uses Citizens Bank for the installment loan, and it requires a valid, US-issued credit card to be eligible.

Is there an age limit?

Yes. Sorry, kids, you need to be 18 years old to apply.

How do I trade in my current phone?

You can take it to an Apple Store and make the swap there, but you can also save the trip and buy from Apple's online store or the Apple Store app. When you order an iPhone online from Apple, it'll arrive with a trade-in kit so you can package up your suddenly outdated phone and ship it back to Apple. You need to get it back to Apple within 14 days.

What if my current iPhone is banged up?

According to Apple, your current iPhone needs to be in "good physical and operational condition." That means it should:

  • Be able to power on and hold a charge
  • Have an intact and functioning display
  • Have no breaks or cracks

I haven't made 12 payments yet on my current phone -- can I still upgrade?

Yes, but it'll cost you. If you've made at least six monthly payments on your current phone, you can pay the difference between your current balance and the total for 12 payments to fast forward the clock and get a new iPhone.

Do I need to upgrade?

No, not all at! You are not forced to upgrade. If you are happy with your current phone, you can keep using it and continuing to pay it off. After 24 months, you will have paid it off and can continue using it without the monthly payment or turn around and sell it to help finance the cost of a new phone when you're ready.

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