iPhone Upgrade Program vs. Apple Card Financing

I currently have an iPhone 12 Pro Max that I purchased in November of 2020 with the iPhone Upgrade Program. The phone currently works fine, but with the release of the iPhone 13 Pro Max, I am wondering if it’s worth upgrading. After all, the monthly payments would be about the same, but I’d get a new phone. There must be a catch, right?

iPhone Upgrade Program vs. Apple Card Financing

The iPhone Upgrade Program uses loans through Citizens Bank whereas financing through the Apple Card is essentially carrying a balance on your credit card. There are pros and cons to both

  • I have several loans through Citizens Bank and, as far as I can tell, none of them show up on my credit report. On the other hand, my Apple Card shows up on my credit report.
  • Citizen’s user interface is very confusing whereas my Apple Card is on autopay and I don’t even think about it.
  • Additionally, you can use your Apple Card as a payment method for your Citizen’s loans to get the 3% rewards.

Thus, unless you are worried about your credit utilization on your Apple Card, financing on your Apple Card is much better.

Sales Tax

When you upgrade your phone, you have to pay sales tax on the entire product, which you can’t finance. For me, this is about a 10% sales tax in California on every upgrade. You may think that you are paying the same amount every year, but you’ll probably forget about sales tax!

Trade-in Value

With the iPhone Upgrade Program, you are effectively trading in your device at 50% of the cost every year. The MSRP for my iPhone Pro 12 Max 256GB was $1,199 last year, and Apple is offering me $790 to trade in. With the iPhone Upgrade Program, the effective trade-in value is $600. Thus, Apple is making $190 more per phone through the iPhone Upgrade Program than from regular trade-ins.

Apple Care

The iPhone Upgrade Program requires you to subscribe to AppleCare, but it’s exactly the same price as subscribing to it on your own. Additionally, if you don’t use the iPhone Upgrade Program, you could cancel your AppleCare subscription anytime. I always buy AppleCare because I am very careless with my phone, so to me this is equivalent.


Every time you a new phone, you probably need to buy a new case for it too. I do because I am very careless with my phone. Apple accessories are expensive - $49 per case - and can also be financed. Additionally, I’ve never had a case that lasted more than a year, so I end up buying at least two cases per phone. This is another cost you need to consider.

To upgrade or not?

Going forward, I am going to stick with Apple Card Installment Plans, subscribe to AppleCare monthly, and trade my phone in whenever I want to upgrade. I am going to let my current iPhone Upgrade Plan expire and never use it again.