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The Best Ways to Finance Your New iPhone 8 or X

Carrier contracts may soon be a thing of the past so it pays to read the fine print when you're financing your new iPhone.

by Jean Chatzky /
A man stands with two bags of purchases at the iPhone 8 Launch at the 5th Avenue Apple Store in New York on Sept. 22, 2017.Apple

It’s been over 10 years since the iPhone’s inception, and in the eyes of many, it’s become an institution in its own right. Exhibit A: Apple was the smartphone industry’s “big winner” in Q3 of 2016, with over 100 percent of smartphone industry profits, according to a report from financial services provider BMO Capital Markets. (FYI: This is possible because other smartphone makers lost money during the period.) As for this quarter? The average selling price of smartphones had been declining for six years, but models suggest it will rebound in 2017-2018, fueled by the new iPhone models.

That’s good news for the business, but how about for consumers? The iPhone X retail cost ranges from $999 to $1,149, depending on storage, the iPhone 8 will set you back $699 to $849 and the iPhone 8 Plus rings in at $799 or $949. If you’re set on purchasing the new model but don’t have that amount of upfront cash to spare, we did the legwork comparing iPhone financing options with Apple, AT&T, Verizon and T-Mobile. Note: There are many similarities, but a few important differences, which is why we're giving them to you one by one. It's not necessarily that one is the better deal than the other (unlike the service prices, which vary widely) — it's just that the terms are slightly different.

Carrier contracts may soon be a thing of the past, and most carriers offer some sort of month-to-month agreement — but if you do finance through them, they kind of have you on the hook.

Carrier contracts may soon be a thing of the past, and most carriers offer some sort of month-to-month agreement — but if you do finance through them, they kind of have you on the hook.

But before we give you the rundown, here's one thing to keep in mind: Carrier contracts may soon be a thing of the past, and most carriers offer some sort of month-to-month agreement — “but if you do finance through them, they kind of have you on the hook,” says John Oldshue, owner of SaveOnPhone.com. “Not only will they come right after you for the rest of the money if you decide to switch carriers in the middle of that time period, but some have a penalty for leaving the carriers.” As always, ask questions and read the fine print before entering into any sort of contract.

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Apple

Payment Installment Program: The bottom line: You pay the phone’s full retail cost but split over 24 months — no added fees. So, an iPhone 8 Plus starts a monthly $33.29 and X at $41.63. The only time you’ll end up paying more than the retail amount is if you in some way default on the loan, according to Apple. As with most refinancing options, it does involve a “mini-loan” — financed by Citizens Bank — and if you go into the Apple Store, you fill out an online application. The monthly payment goes to the lender, Citizens Bank. Note that you will still need a carrier — Apple’s payment plans mean you’re buying the phone itself, but you’ll still need service for it.

iPhone Upgrade Program: If you’re looking to stay up to date with the newest product every year, Apple offers a monthly payment program. It’s the retail cost of the phone plus the cost of AppleCare+ (insurance for damage) divided equally over a 24-month period. The total cost ranges from $99 to $149, depending on the phone model. Again, there are no extra financing charges or interest. Then, you’re eligible to upgrade every year to the new model of the iPhone. Your two-year loan restarts itself, and you have another 24-month loan for your new phone. If you don’t want to trade it in, you can keep the phone you have, and once you’re finished paying off the 24 months, you own it. It’s not tied to any one carrier, so you can switch among them if you’d like.

Trade-Up Program: If you’ve got an existing iPhone — or even an Android — you can bring it into the Apple Store to trade in and get money on the spot that you can put towards a new phone. For example, Apple’s estimated trade-in value for an iPhone 6 is $145, and an iPhone 6s is $200. Trading in an iPhone 7, on the other hand, could net you $325 — and it’d be about $375 for an iPhone 7 Plus. The upshot is that these offers could be higher than if you sold your phone on a technology resale site like Gazelle where an unlocked 64-gigabyte iPhone 6 in good condition would net you around $130 and an unlocked 128-gigabyte iPhone 7 in good condition, $300.

AT&T

AT&T Next: With this program, you can upgrade to a new iPhone about every two years by trading in your current one. You're responsible for the retail cost divided by the number of months in the contract you choose (24 or 30 months) — with "no other fees involved,” according to AT&T. For example, an iPhone 8 would start at around $23.34 a month for a 30-month contract. Note that if you changed your mind and wanted to upgrade mid-contract, you would need to have 80 percent paid off first.

AT&T Next Every Year: Similar to Apple’s iPhone Upgrade Program, this outlines a 24-month contract where customers pay a commensurate fraction of the phone’s retail cost per month. You need to have 50 percent paid off before upgrading, so you’ll be eligible for a new phone after 12 months. At that point, the 24-month contract starts again, and you end up with a shiny new piece of hardware.

T-Mobile

Equipment Installment Plan: T-Mobile’s monthly payment plan is a little different than the others because the 24-month plan requires a down payment for almost all models. (There’s currently a $0 down payment for the 64-gigabyte iPhone 8, but that’s a limited time offer.) For example, the 256-gigabyte iPhone 8 (retail $849.99), has a down payment of $177.99, resulting in a $28 monthly payment. And for the 256-gigabyte iPhone X (retail $1,149.99), the down payment would be $429.99, meaning a $30 monthly payment.

iPhone Upgrade Program: Customers can trade in their current iPhone once 50 percent is paid off, and as with the other programs we’ve outlined, the remaining payments are wiped out — essentially starting the payment contract over again. The kicker: It seems this is only guaranteed when it comes to trading in an iPhone 8, 8 Plus or X. If you want to trade in your iPhone 6 or newer in good condition and want to pick up an iPhone 8, 8 Plus or X, you’ll get up to $300 off (via 24 monthly bill credits), according to T-Mobile.

Verizon Wireless

Device Payment: Similar to the other companies’ installment plans, Verizon offers customers a monthly smartphone payment plan — it’s the retail price, no hidden fees, paid out over a flat 24 months. For example, if you picked up a 64-gigabyte iPhone 8, which costs $699.99 retail, you’d shell out $29.16 per month. For a 256-gigabyte iPhone 8 (retail $849.99), that’d increase to $35.41 a month. This should come with a 0 percent down payment. A customer with poor credit might need to put some money down upfront, and that would go towards lowering their monthly payments. At the end of 24 months, you’d own the phone.

iPhone Annual Upgrade Program: Let’s say you picked up the iPhone 7 from your carrier, and you’ve paid off 50 percent so far in a 24-month contract. Via this program, you could trade it in and upgrade to the newest one. Your contract would start over (similar to the other companies’ programs), and you’d pay 1/24th of the retail price per month, no added cost.

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