After Apple’s press conference on Wednesday, you may have your eye on the new iPhone 7 or iPhone 7 Plus — whether you want to play the new Super Mario Run on the 4.7-inch Retina HD screen (5.5-inches if you go with the Plus) or simply because you’re ready to upgrade your current phone.
Either way, this shiny new gadget, available Sept. 16 (pre-orders start Sept. 9) is going to come at a price. The iPhone 7 starts at $649, and the iPhone 7 Plus starts at $769, so you’ll need to figure out how that’s going to fit into your budget. (Note: Despite the lack of a headphone jack, the latest iPhones will come with lightning-port headphones and a compatibility adapter at no additional cost. So, at least there’s that.)
Apple iPhone upgrade program
According to Apple’s website, the upgrade plan offers you the option of spreading the cost for a new 7 series over 24 months, and you have the option of getting a new iPhone after 12 payments. So, if you signed up for this program last year to buy a 6 and you’ve made 12 payments toward it, you could theoretically be eligible for a new 7.
If you decide to sign up for the program now, you could get the smallest iPhone 7 (32GB) for $32.41/month or the iPhone 7 Plus of the same size for $37.41/month. The middle tier (128 GB) is $36.58/month and $41.58/month, followed by the largest memory size (256 GB) for $40.75/month and $45.75/month. In addition to the phone, this price tag includes the coverage of AppleCare+.
A quick look at financing with the four main providers
Rates will likely vary with each provider, as they typically look at a version of your credit to determine your rates (more on that in a minute). But here’s a general idea of some of their financing options.
- AT&T: AT&T did not immediately respond to a request for comment. However, their website details different installment plans that, once the sales tax is paid, come with $0 down and no finance fees.
- Verizon: According to an email from a Verizon spokesperson, “customers can pay for phones on device payment, which is no interest over a period of time,” which will vary on a case-by-case basis.
- Sprint: The Sprint website outlines installment plans and notes that “there are currently no related service discounts for devices purchased with monthly installments.” But there are no finance fees. Sprint did not immediately respond to a request for comment.
- T-Mobile: A media relations representative said T-Mobile doesn’t “have any details to share” but their site does have different breakdowns on up-front costs of phones based on a consumers’ credit score, including an option for those who want to avoid the credit check and just pay for the device up front. Note: their financing is available in-store only.
Consider your options
“The options depend a lot on what carrier you are on, your current contract status and whether they offer any promotions,” Jim Wang, the founder of WalletHacks.com and a Credit.com contributor, said.
“The first step is to review your phone contract and see when it expires,” Wang said. “If you are out of contract, you have the most flexibility. If you are still in a contract, check when it expires and what the early termination fee might be.”
If you decide to stay with your current provider, Wang recommends checking with them to see if they’ll give you a discount or free phone for extending your contract. Apple also offers a credit of up to $250 when trading in an eligible smartphone. It also never hurts to comparison shop with competing providers. Make sure you look beyond the base monthly charges and compare the fees, Wang suggested, as “these are fees your existing cell provider might not charge you” so you may ultimately save money.
And there’s always the Apple iPhone upgrade program we mentioned before, which Wang said isn’t “the cheapest overall option, but if you must have a new phone each time one is released, it could be the most affordable one.”
Paying for your new iPhone
As we also mentioned earlier, many cell phone service providers will take a look at your credit history to determine the rates you’ll pay for your phone and/or service plan. If you don’t know where you stand, now is the time to find out. You can pull your free annual credit reports from the three major credit bureaus — TransUnion, Equifax and Experian — by visiting AnnualCreditReport.com. You can also see two of your credit scores for free, updated every 14 days, on Credit.com.
If you discover your credit isn’t quite where you’d hoped it would be to get you some of the best terms and conditions, you can take steps to remedy it. You can pay down debts, repair any errors you may discover after reviewing your reports and reduce the number of credit inquiries until your scores rebound.