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The Apple Upgrade Program: How It Works and Everything You Need To Know

The Apple Upgrade Program allows you to get a new iPhone every year by making monthly payments over 24 months. But how exactly does it work, what are the costs, and should you participate? As a tech product analyst, I‘ve researched the program extensively to provide a comprehensive guide.

Eligibility Requirements

To qualify for the iPhone Upgrade Program, you must:

  • Make 12 monthly payments on your current device (about 1 year)
  • Have an account in good standing with no past due payments
  • Maintain AppleCare+ coverage on your iPhone
  • Trade in an iPhone that turns on and functions normally, as per Apple‘s assessment
  • Have any prior repairs or service done through Apple or an authorized provider
  • Enroll before your current installment loan expires
  • Agree to a new 24 month installment loan
  • Trade in your old iPhone and deactivate Activation Lock
  • Remove your SIM card if you upgraded online

These requirements ensure that only customers consistently making payments on devices in good working order can upgrade annually.

How the Apple iPhone Upgrade Program Works

Here are the step-by-step mechanics of how a upgrade through the program works:

  1. Purchase an iPhone from Apple on a 24 month installment plan
  2. After 6 months, enroll that iPhone into the Upgrade Program
  3. Make 12 monthly payments over the next year (about $50 per month)
  4. Become eligible for a new iPhone after 1 year of payments
  5. Trade in your old iPhone to Apple in good condition
  6. Get a brand new iPhone!
  7. Enter a new 24 month installment plan for payments on the new device

So in essence, you are leasing your iPhones from Apple, turning them in after 12 months and continually getting the latest model through a yearly upgrade cycle.

Cost Analysis

At first glance, the iPhone Upgrade Program may seem more expensive than buying a phone outright. But when considering the value benefits, it actually compares favorably:

  • No money down, only $50-60 per month (depending on model)
  • Same monthly cost as buying without the Upgrade Program
  • AppleCare+ included ($129 value)
  • Can upgrade after 12 payments instead of 24
  • Early upgrade benefit worth hundreds vs. outright purchase

So while the monthly payments never stop, you get your money‘s worth through being able to get the latest iPhone every year, which otherwise would not be possible on a 2 year payment cycle.

How It Impacts Your Credit

Since you need to qualify for a new loan every 12 months, the Upgrade Program can impact your credit in a couple ways:

  • Hard credit check each time you get a new iPhone
  • Increased credit utilization reported
  • Potential score drops if too many new accounts

However, as long as you make consistent on-time payments, the effects should be relatively minor for most. But If having the best possible credit is key, consider limiting upgrades to every 2-3 years instead of annually.

Determining Your Ideal Upgrade Frequency

How often should you upgrade? Here are some guidelines based on use cases:

  • Power users: Every year makes sense to enjoy latest features
  • Moderate users: Every 2-3 years sufficient for reliable device
  • Basic users: Every 4-5 years to keep costs low

Ultimately it depends how much you use your phone and value having cutting edge specs. I tend to fall into the 2-3 year moderate user camp for finding the right balance.

Using Any Carrier

A great aspect of the iPhone Upgrade Program is that it allows you to use (and even switch between) carriers without issue. Since you make payments directly to Apple rather than a specific network, you can activate with any carrier during the checkout process when getting a new device. This makes it easy to change to a different data plan or take advantage of seasonal promotions from carriers without being locked in.

Should You Participate?

Overall, the iPhone Upgrade Program provides excellent value for those who always want the latest device and can justify a yearly upgrade cadence. For more casual users on a budget, longer 2-3 year upgrade cycles may be better to minimize costs. Either way, the program offers payment flexibility and guarantees you‘ll get 50% or more of an iPhone‘s value after just 1 year of use by trading it in, which is an exceptionally strong value.