Equifax victims may face another hassle in buying an iPhone

NEW YORK -- Apple fans who froze their credit after the Equifax data breach may end up with another hassle on their hands if they try to get one of the new iPhones that can cost more than $1,000. People who rushed to lock down their credit and want to make any other big purchases may find the same inconveniences.

Since Equifax disclosed 143 million Americans had their Social Security numbers and other personal data hacked, experts have encouraged people who may be affected to put in place what's known as a credit freeze.

That locks down a person's credit from being stolen by identity thieves -- but also could mean delays and more fees for Equifax victims who want to finance a new phone.

You can unfreeze your credit before a big purchase and freeze it again afterward. How long it will take and how much it costs vary state by state.

Experts said generally, it's best to give the major credit bureaus -- TransUnion, Experian and Equifax -- notice of several hours or even a few days before you apply for financing.

And people just getting used to the idea of freezing their credit could pay $3 to $10 for each action at each of the three bureaus.

Payment plans are a growing business for the major wireless carriers, many of which no longer subsidize a customer's purchase, because a monthly payment makes an expensive smartphone more affordable.

And Apple and the wireless carriers often need access to customers' credit reports to approve the sale of a new phone under a monthly plan.

"But if you are someone who has frozen their credit record, you may suddenly discover that you can't afford an iPhone X after all," said Patrick Moorhead, an industry analyst with Moor & Insights.

Providence, Rhode Island-based Citizens Financial Group, which runs the Apple financing program, said any new or existing customer who has a credit freeze on his or her information will be declined financing. Customers would have to unfreeze their credit, at least temporarily.

Sprint, Verizon, T-Mobile and AT&T run credit checks with the agencies for new customers. Policies vary for existing customers.

Analysts said two-year financing plans have become essential to selling high-end smartphones.

International Data Corp. analyst Ramon Llamas called them "critical."

Moorhead expects virtually everyone interested in the new iPhone X, which rolls out later this year, to use an installment plan.

Apple rolled out its program two years ago that lets customers upgrade to a new phone each year and divides the cost of the phone into a monthly payment.

The company doesn't share details on how many customers finance their phones through Citizens/Apple instead of their carriers and declined to disclose how many of its iPhones are financed.

For other carriers, it's clearly big business.

AT&T sold 3.58 million smartphones to customers under payment plans last quarter, according to its most recent filing. Verizon customers financed $14.51 billion in smartphones under the company's payment plan in the first six months of 2017, and roughly half its customers who pay a cellphone bill at the end of each month are on a payment plan.