The $0 iPhone (Brand New)

How to get an iPhone for free! The new iPhone can cost you well over $1000, so I’m going to show you how to get that money for free (with a little work) and that will also get you extended warranty and theft protection at no additional cost. All you need is the right strategy. How can you get an iPhone for free?

You can get an iPhone for $0 by leveraging several credit card bonuses that provide you free statement credits, extended warranty, and phone insurance.

I know the phrasing of this post sounds a little clickbait-y, but it’s to get your attention and this strategy actually works. Utilizing credit card bonuses for their free money has been a popular tactic with credit churners for decades. Read through the post and some of my other content and you’ll see how this actually makes sense. The key to this plan is to have good credit.

You need a good credit score

First off, you need a good credit score. If your credit score is over 700, you’re ready to play the game. For people with a credit score below 700, you’ll need to build up your credit score. Here’s a few posts to help you improve your credit score dramatically:

You can significantly change your credit score in a year if you use the outlined advice above. This will open you up to a world of perks. It’s like being in the first class lounge. You get treated better by banks, banks offer you free money, hotels or flights to use their credit cards and even pay you to use their checking and savings accounts.

Warning: Don’t be in debt

Before we dig any deeper, I highly recommend not doing any of this if you have no self-control. Not many credit cards will warn you about this, but I will. Debt can be a serious problem if you spend frivolously. I actually got out of debt by utilizing credit card and bank bonuses, using 0% APR credit cards, and pretending to be Korean for discounted rent.

Something that really helped me get out of debt was cleaning my home. By moving to a more minimalist lifestyle, I realized how much money I spent on things I didn’t use. Many of these things were “want purchases” rather than “need purchases”. This post is about getting a new iPhone for free, but it’s something I would never spend money on. New cell phones decrease in value by 20-50% in their first 2 years. Reflecting on how I actually use my cell phone, I don’t really do anything were I would need faster processing power, faster internet speeds and a SLIGHTLY better camera.

If you fall into this bucket of users, I highly recommend buying a used or refurbished phone. You could save on 50% of the cost of a new phone, while only having a phone that is 10% lower in quality features. For people that are in debt, this is how you can slowly dig yourself out of debt by utilizing the power of credit card bonuses and the associated benefits.

Getting the Free Money

This is not an exclusive list of credit card offers. This is just a working example of the value you can get from credit card bonuses that are available. All the major banks in the United States offer some type of incentive to sign up for their banking services. You can get a cash bonus from credit cards, checking accounts and savings accounts. Credit card bonuses can come in the form of cash, bank points (which can convert to cash), frequent flyer miles and hotel points. Here, we’ll be focusing on cash.

Chase Sapphire Preferred $835 value (official link, not a referral)

Sign Up Bonus: 80,000 Ultimate rewards points after spending $4000
($1050) Chase Ultimate Rewards bank points can be redeemed as 1.25 cents each until the end of 2020. 84,000 UR (sign up bonus and spend has a total value of $1050,
(-$120) Manufacture spend $4000 at 3% costs = $120
(-$95) annual fee is $95
Net Profit: $835
Extended warranty: Provided as a Visa benefit, but can be difficult to redeem a claim successfully.
You should downgrade this card at the end of the first year to the no annual fee Chase Freedom Flex (CFF). The CFF is a Mastercard World Elite card which will give you additional cell phone insurance when you pay your cell phone bill with the credit card.

American Express Blue Cash Preferred $270 value (official link, not a referral)

Sign Up Bonus: $300 statement credit after spending $3,000
(+$30) 1% cashback on spending $3000 on non-bonus categories
(-$60) Buy the phone $1000 spend (estimate) with the AMEX BCP credit card. Manufacture spend the remaining $2000 at a 3% fee will cost $60
Net Profit: $270
Extended warranty: adds 1 year to the manufacturer warranty (details)
0% APR for the first 12 months
No annual fee the first year, $95 after that. You can get the annual fee waived with a retention offer

Bank of America Premium Rewards $360 value (official link, not a referral)

Spend $3000 get $500 in points.
(+$45) The card gives you 1.5 points per dollar on all spend. $3000 spend will give you an additional $45 (4,500 points).
(-$90) Manufacture spending $3000 will cost $90 at a 3% rate
(-$95) annual fee is $95
Net profit: $360

These three credit cards will net you $1465 and the American Express card will give you the Extended Warranty when you buy the phone with the American Express credit card. After getting your Chase Sapphire Preferred bonus, you could always ask to downgrade the card to the Chase Freedom Flex. If you’re successful, the Chase Freedom Flex has no annual and provides you with cell phone insurance.

Otherwise, you’ll need a Mastercard World or World Elite Credit card for the free cell phone insurance. Here’s a “master list” of “Mastercard” World Elite credit cards.

Getting the Free Extended Warranty

Currently iPhones and other Apple products come with a 1 year limited warranty (details). The Apple warranty provides 1-year eligible hardware repairs. That means Apple only covers hardware failure that occurs under normal phone use. If your phone is damaged from being dropped, then this won’t cover you.

American Express has one of the most generous policies on extended warranty and purchase protection (details). AMEX will add on 1 extra year of warranty provided by their own AMEX insurance company. Since this keeps it all in-house, they want to keep their customers happy and reports from most people trying to place claims with American Express’ extended warranty program have had a very happy experience.

As a person who like to get Full Value, I look into a lot of different options to figure out how to get full value. The Apple card will give you 3% back on Apple purchases which is pretty generous, but the card does not provide you any warranty. I would rather have 1% back with an American Express credit card and have an extra year of Warranty.

The Value of Extended Warranty:

1 year of additional warranty on the iPhone is $59
(Apple Card) 3% cashback on $1000 is $30
(AMEX) 1% cashback on $1000 is $10
The difference between using the AMEX vs Apple card is that you’ll make an extra $20 with the Apple Card. But, you won’t get the additional 1 year of warranty which has a $59 value. This makes using the AMEX card $39 more valuable.

Getting the Cell Phone Insurance

Mastercard has three different levels of cards. There is:

Mastercard (standard)
Mastercard World
Mastercard World Elite

Mastercard World and World Elite include cell phone insurance on your phone when you pay your phone bill with your Mastercard credit card. That’s it. You don’t have to pay for the phone with the card, you just have to pay the monthly phone service bill and your covered. That’s extremely generous. Details on the process and filing a claim can be found here.

The Cell phone insurance covers damage and theft! So if you crack your screen, you can get the screen replaced. But that does come with a $50 deductible. Here’s the details:

You are allowed 2 claims per year
Mastercard World can claim up to $600 each claim and no more than $1000 per year
Mastercard World Elite can claim up to $800 each claim and no more than $1000 per year
A $50 deductible is required with each claim.

So you’re probably thinking, wait, I get $800 each claim and there’s a $1000 yearly limit? How does that work? It means if your phone is valued at $800 or more and it gets stolen twice in a year, you’ll receive $800 the first time and $200 the next time. Each with a $50 deductible.

The Value of Phone Insurance:

Apple Care with Theft and Loss costs $219 for 2 years (or $11.49/mo) for a phone valued up to $979 (highest iPhone price)
Mastercard World Elite cards (some have no annual fee) include coverage on damage and theft for up to $800 for free.
In the event that you lost your phone with Apple care, you will get a new phone.
In the event that you lost your phone with Mastercard Cell Phone Insurance, you would have to pay a $50 deductible and only be reimbursed up to $800. At this point, it would be $750 of value.
$750 (Mastercard) + $219 (Apple care + theft/loss) = $969. Basically the difference is almost exactly the same price of a new iPhone, if you lose your phone in the first year. That’s because the price of the iPhone will drop after a year since a new one will be released. After 1 year of Apple Care, you’ll be taking a consistent loss on your money. Overall you’ll save money with your Mastercard World Elite card if your phone stays safe. You’ll have peace of mind without having money flying out of your pocket every month.

Last Thoughts

Getting free money from the banks is always awesome. A lot of people don’t realize that you can actually get free money from the banks and it’s really as easy as it sounds. For actual effort, probably less than 2 hours over the course of several months. You can use that money to get yourself a free iPhone, or you could invest that into more money.

I don’t think I would spend that much money on a phone while I have a functioning phone with no serious issues. Sure, the battery isn’t as good as it used to be, but that can be replaced for a minor fee.

American Express has an amazing warranty program and I make it a point to use an AMEX credit card anytime I’m making a large purchase that I want to protect.

Mastercard World and World Elite cards are the only credit cards you should be using to pay your credit card. The best card on the market right now is the Chase Freedom Flex because it has no annual fee AND it’s a Mastercard World Elite credit card.