iPhone will be interest-free if you buy it with the Apple Card

Apple CEO Tim Cook makes the announcement as Apple reports its third-quarter earnings.

Corinne Reichert Senior Writer
Corinne Reichert (she/her) grew up in Sydney, Australia and moved to California in 2019. She holds degrees in law and communications, and currently oversees the CNET breaking news desk for the West Coast. Corinne covers everything from phones, social media and security to movies, politics, 5G and pop culture. In her spare time, she watches soccer games, F1 races and Disney movies.
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Corinne Reichert
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iPhones will be sold at 0% interest for 24 months if bought with the Apple Card.

Angela Lang/CNET

Apple will begin allowing customers to buy iPhones and pay them off over two years interest-free, CEO Tim Cook  said Wednesday. But it only works if you buy the handset with the new Apple Card . This will also give customers 3% cash back on the total cost of the phone.

"I'm very pleased to announce today that later this year, we're adding another great feature to Apple Card," Cook said. "Customers will be able to purchase their new iPhone and pay for it over 24 months with 0% interest."

There will also be no fees, Cook added, "and the ability to simply manage their payments right in the Apple Wallet app on iPhone."

The Apple Card was launched in August as the company's first credit card for iOS users only. It's both a digital card on your iPhone in Apple Wallet as well as a physical credit card that you can use wherever the Apple Pay service isn't available.

The news came as Apple reported its third-quarter earnings , which saw the iPhone maker reveal a 2% rise in sales to $64 billion for the three months ending Sept. 28. Most of the sales came from wearables including the Apple Watch and AirPods , and services like iCloud photo and document storage, plus the new Apple Arcade.

"We concluded a groundbreaking fiscal 2019 with our highest Q4 revenue ever, fueled by accelerating growth from services, wearables and iPad ," Cook said in a statement.

iPhone sales fell by almost 10% down to $33 billion, but sales of the iPhone 11, iPhone 11 Pro and iPhone 11 Pro Max could grow in the holiday quarter.

Apple also used the iPhone 11 event in September to announce a new Watch Series 5, a new entry-level iPad for 2019 and updates on the Apple Arcade gaming service. The biggest news was the new iPhone 11's three cameras and advanced computational photography.

First published at 2:45 p.m. PT on Oct. 30.
Updated on Oct. 31 at 3:54 p.m.: Adds more info on iPhone 11 event.

A closer look at the Apple Card credit card

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Watch this: The ins and outs of the Apple Card