3 Smart Ways to Finance the New iPhone 8 or iPhone X

The new iPhone X (Source: Apple)

The new iPhone 8 and iPhone X are drool-worthy devices, especially if your smartphone has taken a beating, no longer stays charged, or shoots crummy video. With new features like facial recognition and an all-glass design, they’ll be hard to resist.

The iPhone 8’s standout features are an all-glass design, wireless charging, and a retina HD display and technology that’s expected to make images crisper and more colorful. Camera improvements include a new color filter, a faster and larger sensor, and new technology that helps to keep your photos and videos from being shaky.

The iPhone X comes with two cameras and sensors with Face ID and a 5.8-inch “super retina” display, in addition to an all-glass front and back, wireless charging, and other new features available in the iPhone 8.
But, of course, these new editions come with a hefty price tag.

The iPhone 8 will start at $699 for a 4.7-inch display and $799 for a 5.5-inch iPhone 8 Plus. You can pre-order the iPhone 8 starting at 12 a.m. PST on Sept. 15.

You’ll have to wait until Oct. 27 at 12 a.m. PST to pre-order its fancier big brother, the iPhone X, which comes in at a staggering $999 base price.

Before you get sticker shock, here’s what you need to know to purchase and finance these souped-up smartphones, and to possibly carve out extra funds for new accessories.

Siri: How Do I Finance a New iPhone?

There’s no better way to pay for a large purchase than cash. You don’t take on new debt and the item is all yours free and clear. But if you don’t have the funds handy and you’re determined to get your hands on the newest iPhone, there are several ways to finance.

Just be sure you’re careful to pick the best choice for your finances. We’ll cover all your options below.

1. Finance directly with your carrier

 

The new iPhone X (Source: Apple)

The major carriers offering the new iPhones mostly have their own version of a financing deal, allowing you to break up payments over a set period of time. We’ll cover the highlights of a few major carriers below.

What to watch out for when you finance through a carrier:

  • If you cancel your plan before your phone is paid off, you may have to pay off the full balance immediately. Read your terms carefully.
  • Ask if the carrier will be doing a hard pull on your credit report, which could be a ding that you don’t want to take. Some carriers, like AT&T, say credit approval is required, but the fine print doesn’t provide a credit score minimum.

AT&T: AT&T has two financing programs — AT&T Next and AT&T Every Year. AT&T Next requires mostly no money down (but you will have to pay for sales tax), has no finance charges, and divvies up the monthly payments over 24 or 30 months. You can trade in your phone and get a new upgrade every two years. AT&T Every Year offers the same basic financing deal but with the ability to get a new upgrade every year with trade-in.

T-Mobile: Customers can finance a new iPhone through T-Mobile’s installment plan, which breaks up payments over 24 months. As an incentive, the carrier is offering a $300 credit for people who trade up from an iPhone 6 or newer, but that credit is spread across the term of your installment plan.

Sprint: Sprint is offering half off the iPhone 8, with a trade-in if you finance with their monthly Sprint Flex plan starting at $14.58 a month.

2. Sign up for special financing through Barclaycard

The new iPhone X (Source: Apple)

Through a partnership with Barclays, consumers can receive up to 18 months of 0% promotional financing if they purchase the new iPhone ($999 to $1,149, depending on the model you choose) on the Barclaycard Visa with Apple Rewards card. They also can receive special financing on other qualifying Apple purchases — except for iTunes purchases — made within the account’s first 30 days.

You’ll also earn points on purchases at Apple, specifically three points for every $1 spent at store.apple.com, the Apple Store, the iTunes Store, or 1-800-MY-APPLE. To be eligible for the credit card, you also have to be 18 years and older.

The length of the promotional 0% financing offer depends on how much you spend.

  • 6 months: less than $499
  • 12 months: $499 to less than $999
  • 18 months: $999 to less than $1,499
  • 24 months: $1,499 and over

But before you apply for this card, there are some caveats that are important to note.

Deferred interest. If you don’t pay off your card before your promotional period ends, you’ll get hit with deferred interest charges. That means they’ll act as if you’d been paying interest all along and add the entire total to your credit card bill.

Interest will be charged to your account from the purchase date if the balance isn’t paid off by the end of the promotional period or if you make a late payment. The annual percentage rate (APR) on your purchase will be 14.99%, 20.99% or 27.99%, based on your credit history when you open the account.

If you purchase the lowest cost version of the iPhone 8 ($699), at best you could qualify for the 12-month 0% intro APR offer. That would require monthly payments of at least $58.25 per month if you want to pay it in full and avoid getting slapped with deferred interest.

You won’t have to worry about interest if you pay the balance for your new iPhone in full by the end of your promotional period. Know your deadline, since it may be different from a friend’s deadline if they spent more or less than you.

3. Use a no-interest, no-fee credit card

If you can’t fork out the full amount, look for other credit cards with 0% intro interest offers and zero fees. Pay attention to the length of the 0% intro offer because you will need to pay off the purchase before it expires or you might be hit with interest.

The Citi Simplicity® card is MagnifyMoney’s top pick for credit cards with a 0% intro APR offer right now. The card gives you 0% intro APR for 21 months after you open the card, and there’s no annual fee.

The best part? There’s no sneaky deferred interest clause, which means if you don’t pay the card off in full after that 21 months are up, you won’t get back-charged for interest.

Just make sure you purchase the phone after you open the card because the 21-month time limit starts ticking from the moment you’re approved, not from when you make a purchase.

How to get a discount on your new iPhone

iStock

If you’re savvy, you can try these ways to shave some money off the total cost of a new iPhone.

Switch carriers to score discounts

Check out the offers from your current phone carrier or a competitor if you’re interested in switching carriers and can do so without penalty. Some promotions include a discount on the purchase of a new iPhone if you trade in your old phone, or discounts on other Apple products.

Most promotions have caveats, such as required enrollment in a monthly installment plan or credits divided into a series of lower payments.

Trade in to trim the cost

Verizon is offering $300 off an iPhone 8 if you trade in phones from a list that includes iPhone 7, iPhone 6s, Galaxy S8 and Moto Z2 Force.

T-Mobile’s $300 credit will be broken up over a 24-month installment plan for consumers who turn in a paid-off iPhone 6 or newer version, according to its @TMobileHelp Twitter account.

Sprint is offering half off the iPhone 8, with a trade-in and the monthly Sprint Flex plan starting at $14.58 a month.

You can receive up to $260 in credit from Apple if you trade in an eligible smartphone. Estimated trade-in values, according to Apple, include:

  • iPhone 5: $45
  • iPhone 5c: $35
  • iPhone 5s: $70
  • iPhone SE: $135
  • iPhone 6: $135
  • iPhone 6 Plus: $170
  • iPhone 6s: $215
  • iPhone 6s Plus: $260

Of course, you don’t get the credit in cash outright, but here’s what you can do with the trade-in bonus:

  • Apply the credit to the full iPhone cost or the monthly payments to your mobile carrier.
  • Use the credit toward the purchase of any device at the Apple Store.
  • Receive an Apple Store gift card by mail.

Upgrade your old phone through Apple

Apple’s iPhone Upgrade Program is still around. If you have made at least 12 payments for an existing iPhone, you can return your phone to Apple and upgrade to a new version.

For this program, payments start at $34.50 a month, and you will enter into a 24-month, 0% APR agreement with Citizens Bank, also an Apple bank partner. A credit card is required for this program, which also provides AppleCare+ coverage (a $129 value).

You have to activate the phone with AT&T, Sprint or Verizon, or activate with T-Mobile through the Apple Store. There’s no requirement that you remain with a certain carrier, if you want flexibility in switching carriers while paying off the phone.

The perk of this program is that Apple says the new iPhone will be shipped to your house for free or you can pick it up in a store. Then you will either use the Trade-in Kit to return your old iPhone to Apple or bring it to the store.

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For Mac Users, The Security Bubble Has Burst

Apple’s Mac operating systems are known for their resistance to malware, viruses, hackers and ransomware, which is one reason many people opt for Mac computers.

Still, they’re not invincible, and as a security company recently reported, Mac users should be aware of potential threats. Researchers at Palo Alto Networks reported finding “the first fully functional ransomware seen on the OS X platform,” according to a March 6 post on their site.

What Is Ransomware?

Ransomware is what it sounds like: Cyber criminals infiltrate your computer and hold it (or more specifically, its data) hostage. They demand you pay them if you ever want your files back. They often want payment in digital currency like Bitcoin, because these transactions are difficult to trace — and it’s a hassle for the victim to acquire and transfer.

Apple did not immediately respond to request for comment on the reported attack. However, Palo Alto said in its blog post that, after it reported the occurrence to Apple, the Mac maker shut down the infiltration and updated its anti-virus system.

How to Protect Yourself

Ransomware attacks can be particularly stressful for consumers if the stolen data includes personal information, work data or irreplaceable files (think photos). Not only is this a case to back up your hard drive, it’s also a reminder that you may want to install anti-virus software or malware protection on your computer, no matter how secure you think it is.

Guarding your personal information is no joke. Losing your sensitive information to a criminal puts you at risk for identity theft. It can take a lot of time and money to recover from identity theft, not to mention the credit damage you might suffer. On top of that, if someone gets access to your Social Security number, the risk of fraud never goes away, because the Social Security Administration rarely changes numbers.

Protecting your devices goes hand-in-hand with habits like reviewing your financial accounts for unauthorized activity and monitoring your credit for signs of fraud. (You can see a free summary of your credit report, updated each month, on Credit.com.)

Taking steps to prevent cyberattacks is important, but so is having a plan for how to deal with one if it happens. Ideally, such planning will make the incident less stressful and less costly. You can report cyber crime to the Federal Bureau of Investigation and go here to learn what to do if you are a victim of identity theft.

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Why Apple Is Right to Protect Your Privacy

protect your privacy

Steve Jobs understood what people want. His insistence on making hard things easier — for instance, using a personal computer — was an essential part of the Apple success story. Apple CEO Tim Cook has been doing the same thing — but now the “hard thing” is privacy and encryption.

Apple has consistently earned top marks for its privacy and data security policies. That said, since the San Bernardino shooting, which left 14 dead and 22 seriously injured, the company’s privacy-first approach has been experiencing a sort of baptism by fire.

Much debate has arisen around the encryption on San Bernardino shooter Syed Rizwan Farook’s iPhone 5C. Shortly after the shooting, the iCloud password associated with Farook’s phone was reset by a law enforcement officer attempting to gather information.

The snafu purportedly eliminated the opportunity for any information on the phone to auto backup onto the cloud when the device was used on a recognized Wi-Fi network. This information could have then been retrieved.

According to ABC News, the last time Farook’s phone had been backed up was Oct. 19, 2015 — a month and a half before the attack. According to court documents, this fact suggested, “Farook may have disabled the automatic iCloud backup function to hide evidence.”

Apple provided the FBI with the iCloud backups prior to Oct. 19. But the government wanted access to the phone, at least partially to discern if Farook had any terrorist ties. And, to get to it, the FBI asked Apple to reverse a feature that erases an iPhone’s data after 10 failed attempts to unlock it. If Apple did so, the government could use software to guess Farook’s passcode.

The FBI argued its reset of Farook’s password should not prevent Apple from honoring this request.

“It is unknown whether an additional iCloud backup of the phone after that date — if one had been technically possible — would have yielded any data,” the agency said in a statement. “Direct data extraction from an iOS device often provides more data than an iCloud backup contains.”

And, last week, a federal court ordered Apple to develop a custom iOS so the FBI could gain access to the phone. Apple is refusing to comply with the court order.

“Building a version of iOS that bypasses security in this way would undeniably create a backdoor,” CEO Tim Cook said in an open letter to Apple customers. “And while the government may argue that its use would be limited to this case, there is no way to guarantee such control.”

What’s at Stake

Consumer awareness around privacy and encryption has gained traction, following Edward Snowden’s revelations regarding the scope of government surveillance practices at the National Security Agency. Still, the public’s response to Apple’s current plight remains divided.

While some pundits, commentators and high-profile figures have argued the FBI should be able to access phone records in cases where national security may be at risk, others have come to Cook’s defense, arguing he is right to protect Apple customers. I, too, believe he is right to stand his ground here. In an environment where many companies would allow law enforcement to access private information, Apple is standing up for consumers and suggesting they can no longer tolerate routine incursions into their private lives — whether the so-called trespassers hail from the halls of government or invade in the interest of commerce.

To create an iOS or any other kind of backdoor into a personal device creates moral hazard. The potato chip theory applies to law enforcement and the erosion of the constitutional rights guaranteed to all U.S. citizens. One potato chip leads to another, and it’s hard to stop eating them. In the same way, one legal mulligan leads to another.

There has to be a point in the evolution of consumer privacy (or its disintegration) where we can no longer lower our standards as fast as our situation is deteriorating. When it comes to our privacy we really have to stand firm — and Tim Cook is doing that.

Executive Director of the Privacy and Big Data Institute at Ryerson University Ann Cavoukian long ago coined the phrase “Privacy by Design” to describe what’s starting to happen in the U.S. marketplace. Her theory was that consumers will start shopping for the best deals on their privacy — the less personal information required by a potential service or product, the more appealing it will be to the consumer.

So in that regard, the Justice Department is right to suggest, as it did last week that Apple is trying to protect its “public brand marketing strategy.” But in this instance, the strategy is consumer advocacy — nothing more or less. Privacy is not a brand. It is a right. And, contrary to popular belief, it’s no longer particularly hard, either. Apple’s strategy is to provide a useable product that is safe — and protects users against a potential war on their privacy.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

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