June 2015 Update: With the iPhone 6, Retina iMac, the new iWatch, Apple has an incredibly strong product line up ever this year, which is driving millions of new purchases.
While Apple excels at building great products, the Apple financing through Barclays still leaves a lot to be desired. We’ve updated our review for the 2014 holiday season but our overall verdict remains – if you need to finance your Apple purchases there are better options!
If you are looking to finance an Apple purchase, we now highly recommend using a cash back card that offers an introductory financing offer, like the Citi Double Cash Card or the Discover it Card. Or you can check out our Guide to Cash Back Credit Cards for additional ideas, if you already have one of these cards.
If you are not interested in a new credit card, you may still want to check out The Ultimate Guide to Saving Money on Apple Products.
Thinking about applying for the “Special Financing” on Apple.com? You may want to think twice, here’s why applying for the infamous Apple credit card may not be such a good idea.
For 2014, Apple offers two types of credit cards: the Barclaycard for financing purchases and the iTunes Rewards version that earns rather poor rewards. The Barclays Apple Credit Card is easy to qualify for and offers enticing financing options, such as 12 months no interest on an Apple purchase over $999 if paid in full within 12 months.
If you’re thinking about financing an expensive Apple product with this card, WATCH OUT for the fine print. This card is overall a bad choice to finance a large purchase and may end up costing you more than you think.
Financing Promotion too Good to Be True?
If you finance an Apple laptop with the Barclaycard, you’re probably interested in taking advance of their no-interest financing.
For purchases under $999 you’ll receive 6 months of no interest if the balance is paid in full within 6 months, while a purchase over $999 qualifies for 12 months of no interest if paid in full within 12 months.
If that sounds like a great deal, consider what happens if you’re even a day late to pay off your balance in full before the promotion period ends. The interest is only deferred and will be added retroactively to your balance while new interest will continue to accrue.
As an example, say you buy a $2,000 laptop with your new Barclays card and receive no-interest for 12 months. When the 12 months is up you still have a balance of $200 remaining. Think you’ll only be paying interest on $200 from here on? Think again.
Interest will be automatically added to your account for the original $2,000 purchase for the past 12 months at a whopping 22.99%!
Your balance is now $660 and interest will continue to accrue until your balance is paid in full.
Important Note: There is also a time limit to qualify for the 6-month or 12-month deferred interest promotion. This promotion will only apply to the first qualifying initial purchase made with your card during the first 30 days of opening the account.
If you hold off any wait until the 32nd day to buy a laptop or other large purchase, you will not get the deferred interest promotion at all.
Yet Another Catch: Partial Shipment of Orders
As they say, the devil is in the details. If you make a purchase online that must be shipped to you, it’s possible you won’t receive the full 12 month no-interest promotion if the purchase total is over $999.
According to the fine print: “If a partial order that is shipped and billed to your account is an amount that is less than $999 then your account will not initially be given the 12 month promotional deferred interest offer and instead your initial statements will reflect the promotional offer described above for a transaction that is less than $999.”
Assume you purchase a $1500 Macbook Pro Retina and a $300 iPad. If the iPad ships first, it will receive a 6-month deferred-interest promotion while the Macbook Pro gets the 12-month promotion. The fine print does say that Barclaycard will monitor the account and aggregate the total and, if it’s determined that the amount if over $999, you will receive the 12-month deferred offer. It states that this adjustment will occur by the 2nd or 3rd billing statement, although it’s easy to imagine this can be overlooked.
You could end up thinking you have 12 months to pay your total balance and find a nasty surprise during the 7th month when you’re charged the deferred interest!
According to Barclaycard, they’ve received so many calls from customers they are willing to bundle your purchase together so it all receives the 12-month financing, although you must take the time to call them on your own.
Beware of The High APR and Penalty APR for 2013
While this isn’t exactly fine print, it should be pointed out that the Barclays Apple card has an extremely high APR of 22.99%, which makes it an awful choice to carry a balance and finance a purchase. The penalty APR is also the highest you’ll see at up to 30.24%.
When will the penalty APR apply? This APR will automatically be applied to your account if you miss a single payment, have a payment returned or go over your credit limit at all. If you make 6 consecutive on-time payments, the penalty APR will no longer apply to your existing balance but it can apply to new balances indefinitely.
What You Should Do
If you do decide to finance a purchase with the Barclays Apple card, make sure your balance is paid in full before the promotional period ends. When you make the purchase, mark the absolute pay-off date on your calendar and then go back two months and make a note to yourself that your promotional terms end soon. This will help you keep that deadline so you don’t wind up with hundreds of dollars in interest charges.
