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2 good reasons to buy the iPhone 13 with the Apple Card

You'll get 3% cash back and interest-free financing for up to 24 months. But the trade-in offers are where you'll save big.

The Apple Card
ConceptsiPhone

The iPhone 13 is here -- the new phone debuted at Apple's Sept. 14 event. The four new iPhone 13 models -- the iPhone 13, the iPhone 13 Mini, the iPhone 13 Pro and the iPhone 13 Pro Max -- are available to preorder and will be released on Sept. 24. If you're hoping to grab an iPhone 13, it may be worthwhile to finance your purchase with the Apple Card.

Though it's not quite a slam dunk, the Apple Card -- which debuted in 2019 -- is worth a look, especially if you're in the market for an Apple product. For prospective iPhone 13 buyers, paying with the Apple Card offers two main benefits -- 3% cash back on all Apple purchases and interest-free monthly payments. When applied to the lineup's priciest model, the $1,099 iPhone 13 Pro Max, you'll earn an instant $32.97 discount. 

If 30 bucks doesn't sound like enough incentive to use the Apple Card, combining this offer with trade-in offers could net the most savings -- if you buy directly from Apple. You'll earn 3% when buying online through Apple or at a physical Apple Store, while still gaining access to trade-in values from specific carriers. 

T-Mobile, the only carrier that lets you earn 3% with your Apple Card, is offering up to $500 off any iPhone 13 model in return for financing and trading in an eligible device. If you have T-Mobile's Magenta Max, you can save up to $1,290 by trading in an iPhone 12 Max. 

ATT is offering up to $1,000 off the iPhone 13 Pro or Pro Max and up to $700 off the iPhone 13 and Mini, while Verizon is offering up to $800 off any model of iPhone 13. That means with both carriers, you could get an iPhone 13 or Mini for free, but you won't earn 3% unless you trade-in your old phone directly with Apple and not your carrier. 

How the Apple Card works

A few other Apple Card basics: In addition to its digital format, there's also a traditional, physical card, made of titanium, that has no number, CVV code or expiration date or signature. It's characteristically Apple, both minimalist and elegant. There are no late fees, annual fees, international fees or fees for going over your credit limit. 

And if you intend to buy directly from Apple, you can use the Apple Store app on your iPhone to speed up the process. You can pick out your exact model, go through the approval process with your carrier for the upgrade and even sign up for an Apple Card or agree to the iPhone Upgrade Program terms. 

The fine print -- and the alternatives

But you will pay interest (on non-Apple purchases, at least): The variable APR ranges from 10.99% to 21.99%. And there are other caveats. Some carriers and retailers may offer a discount on the iPhone 13 that exceeds what you'd earn back paying list price with the Apple Card. As with most credit cards, approval for the Apple Card and the installment payment plan are both subject to a credit check. And, even if you sign up for the installment payment plan, Apple will still charge interest on taxes and shipping costs. 

Read more: Apple Card vs. Apple Pay vs. Apple Cash

Furthermore, the Apple Card's rewards program isn't necessarily as compelling as other cards'. Its top tier cash-back rate of 3% applies only to Apple products (and services) and a modest, though growing, list of merchants that includes Duane Reade and Walgreens, Exxon and Mobil, Uber and a handful of others. Otherwise, you get 2% cash back on purchases made using Apple Pay and 1% on everything else. In contrast, the Citi Double Cash Card offers 2% on all purchases -- 1% at purchase and 1% when you pay off the purchase -- no matter how you pay.

As such, unless you're regularly buying big-ticket Apple items throughout the year -- or the iPhone 13 is the one credit card purchase you intend to make in 2021 -- there may be better cash-back options. The Amazon Prime Rewards Visa Signature Card gives you 5% cash back on all Amazon and Whole Foods purchases, which covers a much wider swath of products and services. 

Read more: Apple Card vs. Amazon Prime Rewards Visa: Which credit card is best for you in 2020?

It's also worth noting that the Apple Card offers no new signup bonus -- a staple of the cash-back card category that can earn you hundreds of dollars when you meet certain spending thresholds. For example, the Capital One Savor Cash Rewards Credit Card pays a $300 bonus when you spend $3,000 within the first three months. And that's on top of the 4% cash back on dining and entertainment, 2% at grocery stores and 1% back on all other purchases.

As with most things, the best credit card for you depends on how you use it. In 2021, we've looked at dozens of credit cards and identified the best credit card options across a variety of categories. We've analyzed rewards credit cards -- including those that pay cash back on every purchase, earn you rewards points and miles for all kinds of travel purchases, or have the best welcome bonuses. We've assessed which credit cards are best for students, optimal for Amazon Prime shoppers and worthwhile for Apple Pay aficionados. Check out all of our credit card reviews at CNET's personal finance site.

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