Apple will stop funding Apple Card for iPhones purchased without a carrier connection

Apple is making a major change to its Apple Card monthly payment purchase option for iPhone buyers. Starting in August, Apple says it will no longer allow customers to buy SIM-free iPhone models using Apple Card financing. Instead, carrier connection with AT&T, T-Mobile or Verizon will be required.

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Previously, Apple allowed buyers to purchase an iPhone with the Connect to a carrier later option. This option means that users are free to use the iPhone without a cellular connection or through any carrier of their choice. For example, you can connect an iPhone purchased with this option to a carrier like Mint Mobile or Google Fi.

Starting August 15, however, Apple will require any iPhone purchased through Apple Card monthly installments to be connected to AT&T, T-Mobile or Verizon at the time of setup. This effectively prevents iPhones purchased with Apple Card monthly installments from being used with other carriers.

The Connect to a carrier later option will no longer be available for purchases funded by Apple Card monthly installments. This used to be the case with iPhones purchased from Apple Stores, but now it also applies to online purchases. Note that iPhones will still be unlocked, but a carrier connection will be required at setup.

Apple explains:

Carrier-connected iPhone14 and iPhone14 Pro models will arrive ready to activate with eSIM and will be able to connect to your cellular voice and data service without a physical SIM card.

If you completed the steps to authorize activation with AT&T, T-Mobile, or Verizon when you bought your new iPhone online, it will arrive ready to use. Just turn it on and follow the on-screen instructions to set it up and activate it with the operator. For activation with eSIM, you will need Wi-Fi for setup.

If you choose Connect to a carrier later when you buy your iPhone, you can activate the service when you get your device. If you’re asked to transfer your SIM, follow the onscreen instructions to transfer the service from your previous iPhone.

Apple made this announcement via a small footnote on its iPhone Buying Web page. In this same message, Apple also states that the term for Apple Card monthly installments for Apple Watch will be reduced from 24 months to 12 months:

Currently, a carrier connection with AT&T, T-Mobile, or Verizon is required for all iPhone purchases made with ACMI from Apple Store locations only. As of August 15, 2023, a carrier connection with AT&T, T-Mobile, or Verizon is required for all iPhone purchases made with ACMI.

Effective August 15, 2023, the ACMI installment term for new Apple Watch purchases will increase from 24 months to 12 months.

Current funding options with Apple Card. Starting August 15, the Connect to Any Carrier option will no longer be available.

9to5Mac takes

This change to iPhone financing options is intriguing. You can also finance the purchase of an iPhone from Apple through a loan provided by Citizens Bank. This, however, requires users to apply for a loan, run a credit check, and potentially affect their credit score even if they already have an Apple Card account.

My guess is that Apple is making this change in part due to pushback from carriers, who may have noticed a drop in customers buying connected iPhones due to Apple Card monthly payment options. Apple, however, hasn’t officially given any reasoning for the change.

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