Apple just gave up on being your bank. Klarna wins.

Apple shut down its iPhone Upgrade Program and iPhone Payments in the US on July 28, 2026, replacing them with Apple Upgrade, a leasing program run by Klarna. Under the old system, you paid over 24 months and owned the phone. Now, you lease: ownership only comes if you pay a purchase fee at the end.

Apple Upgrade offers 12- and 24-month leases for iPhone and Apple Watch, longer for Mac and iPad. Starting payments: $17.99 for an iPhone, $11.99 for a Watch, $24.99 for a Mac, $11.99 for an iPad, with no trade-in. Trade-ins through Apple Trade In can lower those. A soft credit check is required, handled by Klarna, which provides a dedicated app for billing and upgrades. Apple Card holders still get 3% Daily Cash on lease payments, a loyalty hook that keeps users inside its ecosystem (Microsoft's cleaner search).

The key difference from the old program: ownership. Return the device at lease end or buy it outright. This structure benefits annual upgraders but costs more for long-term owners. Apple Card Monthly Installments remain an option, but only for Apple Card users. AppleCare is available with the lease.

Why hand off financing to a Swedish fintech? Risk. Lending requires managing defaults, fraud, and regulations. Klarna absorbs that burden while Apple keeps selling hardware and services like iCloud and AppleCare. The move signals that Apple is stepping away from direct lending after years of building Apple Card. For customers, it means navigating Klarna's app instead of Apple's. The shift ends an era where Apple handled the full purchasing experience. This retreat from direct lending mirrors a broader pattern in tech where companies outsource risk to partners. For example, while Apple pulls back, Tesla continues to invest heavily (our analysis of Tesla's earnings).