Did you buy your iPhone outright, or pay monthly?

[Applejuiced]

The above comment is a sample of indirect cost: freedom cost, cannot change a carrier if something goes wrong with the carrier or you can terminate the commitment and pays a great amounts of penalty cost.

I agree, its a term that locks you in with them.
But Im not the type to jump from carrier to carrier much and Im very happy with my current carrier.
I dont plan on leaving them.
I was with AT&T since 1997 before I switched away 2 years ago.
So mind as well take advantage of a great offer.
[doublepost=1497757775][/doublepost]

I don't use apples program but if it's like carriers it doesn't even show up. Otherwise jt would just look like a line of credit and will help you actually assuming you're not late and pay it off.


Also a loan would also help your credit as well.

Its not like carriers finance plan though.
Its a separate line of credit financed by Citizens Bank.
To some a hard pull and an added credit obligation account with an outstanding balance of $800-1000 could negatively impact their credit or even cause issues if they apply for a loan for something else.
[doublepost=1497758009][/doublepost]

I never said I didn't. You should but IMHO why pay upfront when there is no financial difference.

For me leasing the phone is actually cheaper. I have a 18 month lease at $13 a month. I paid $100 for the 128gb upfront.


I will pay around $230 for he lease payments and $330 total. I win in that arrangement.

Your math is kinda confusing.
So you will pay $334 for a new 128GB iphone?
Leasing the phone is cheaper?
[doublepost=1497758620][/doublepost]

Valid point. But, if you do the same program with the carrier, you do not have to do that. And, of course, you can buy yourself out of it at anytime you want. Or do the upgrade at 12 months.

The problem with most carriers is they want to keep you in that finance program. So they try to use it as a 2 year agreement.
So yes you can pay it off at anytime but you will have to pay it off in full at once or make the minimum payment. Nothing else in between.
I like how the Tmobile program works where you can pay the minimum 1 month, send $100 extra next month, then $160 a month later etc...
So you can pay it off as fast as you want and depending on how comfortable you are at a particular month.
You dont get that from other carriers.
[doublepost=1497758751][/doublepost]

Yup. At 0% APR, financially, EIP via carrier and paying cash costs the same assuming you're sticking with the same carrier and plan. For those who upgrade every year, it also gives you an option with known trade-in value right from the get go.

Yes, but that trade in value is a rip off.
You're basically give away all the payments you made for a year for example and start a brand new monthly plan for the new phone.
[doublepost=1497759014][/doublepost]

And really, I realize that math-wise, paying cash is better. However, financing the car for low interest while keeping more liquid cash is a safety blanket. All psychological.

If $650 liquid cash at the bank is a safety blanket then forget it.
You should reconsider your options and live within your means.

 

[Cogsworth]

I make monthly payment on my iPhone 7+ through AT&T, with a nice credit every month from the trade in of my iPhone 6+.

 

[rui no onna]

Yes, but that trade in value is a rip off.
You're basically give away all the payments you made for a year for example and start a brand new monthly plan for the new phone.

You don't pay $650-950 upfront for the phone to begin with. On the 24-month EIP, with early upgrade at 12 months, trade-in value is effectively 50% of MSRP. Depreciation hit via carrier EIP trade-in is 50%. Not much different than, say, paying $750 for your phone cash, then after a year, selling/trading in for $375 and using the proceeds to buy a new phone.

Again, it's just an option if one does not want to deal with the hassle of selling.

That said, now that there's no more 2-year contracts, I'm inclined to keep phones for as long as they're working. Wouldn't have upgraded from iPhone 6 to iPhone 7 had the carrier not been effectively giving the iPhone 7 for "free" in exchange for the 2-year old iPhone 6. Would've been a different story if I had the newer 6s.

 

[nostresshere]

Why do folks say doing the 24 month plan "locks" them in?

You can opt to pay it off if you want, and move.

 

[Applejuiced]

You don't pay $650-950 upfront for the phone to begin with. On the 24-month EIP, with early upgrade at 12 months, trade-in value is effectively 50% of MSRP. Depreciation hit via carrier EIP trade-in is 50%. Not much different than, say, paying $750 for your phone cash, then after a year, selling/trading in for $375 and using the proceeds to buy a new phone.

Again, it's just an option if one does not want to deal with the hassle of selling.

That said, now that there's no more 2-year contracts, I'm inclined to keep phones for as long as they're working. Wouldn't have upgraded from iPhone 6 to iPhone 7 had the carrier not been effectively giving the iPhone 7 for "free" in exchange for the 2-year old iPhone 6. Would've been a different story if I had the newer 6s.

I hear you, I like to keep my phone for a few years.
But with the trade in program you're paying $375-500 to use the phone for a year. Pretty much renting it. And then handing it in and starting all over again.
It's a waste of money to me.

 

[ftaok]

I prefer to pay up front with my credit card in order to get the extended warranty my CC offers. If I were to use the Next plan, or even the Apple plan, I'd lose that benefit from my credit card.

To me, the opportunity cost lost in paying up front is more than made up by getting an additional 2 years of warranty.

 

[rui no onna]

I hear you, I like to keep my phone for a few years.
But with the trade in program you're paying $375-500 to use the phone for a year. Pretty much renting it. And then handing it in and starting all over again.
It's a waste of money to me.

That's optional though. Really not much different compared to paying cash and buying a new phone every year. You still get hit with the first year depreciation. You just get maybe $100 more via DIY selling after fees, shipping, etc.

The big savings is in not updating your iPhone every year. Not which method you use to pay for the device (at least when comparing cash with 0% APR financing).

I prefer to pay up front with my credit card in order to get the extended warranty my CC offers. If I were to use the Next plan, or even the Apple plan, I'd lose that benefit from my credit card.

To me, the opportunity cost lost in paying up front is more than made up by getting an additional 2 years of warranty.

Wells Fargo actually offers extended warranty on cellphones if you pay your monthly cellphone bill with a Wells Fargo credit card. Never needed to use it yet, though (knock on wood).

 

[ftaok]

Wells Fargo actually offers extended warranty on cellphones if you pay your monthly cellphone bill with a Wells Fargo credit card. Never needed to use it yet, though (knock on wood).

That's good to know. I use the Costco Citibank card. The terms/conditions do not mention anything like that, so I'd bet that Citi won't provide the extended warranty on monthly pay options.

Also, with my CC, they specifically say that the coverage will be up to the amount that you charge on the card, so I suppose if you used it to put a down payment, then you'd be covered for up to that amount.

In the end, $750 is not that big of a deal for me, every 3 to 4 years.

 

[nostresshere]

I hear you, I like to keep my phone for a few years.
But with the trade in program you're paying $375-500 to use the phone for a year. Pretty much renting it. And then handing it in and starting all over again.
It's a waste of money to me.

With the trade in program, you have the option to trade up. If you want to keep it for a few years, you then have the OPTION to do so. At no extra cost to you. None.

So, if you are going to keep it longer than the 2+ years, that is fine. Still no reason to pay for it all up front. (except those that just like to do that for some personal/psychological reason. (there is no financial reason).

 

[rui no onna]

That's good to know. I use the Costco Citibank card. The terms/conditions do not mention anything like that, so I'd bet that Citi won't provide the extended warranty on monthly pay options.

Also, with my CC, they specifically say that the coverage will be up to the amount that you charge on the card, so I suppose if you used it to put a down payment, then you'd be covered for up to that amount.

In the end, $750 is not that big of a deal for me, every 3 to 4 years.

Afaik, Wells Fargo is the only card issuer that offers it. That certainly factored in when I was choosing whether to pay via credit card (paid off in full every month) or via carrier EIP.

That said, it's certainly nice that keeping phones for 3-4 years is actually a realistic option now both in terms of device performance and carrier service cost. On the old-style subsidy plans, you still keep paying the subsidy even when you go past 2 years so we always upgraded once the contract was up.

 

[Closingracer]

That's optional though. Really not much different compared to paying cash and buying a new phone every year. You still get hit with the first year depreciation. You just get maybe $100 more via DIY selling after fees, shipping, etc.

The big savings is in not updating your iPhone every year. Not which method you use to pay for the device (at least when comparing cash with 0% APR financing).



Wells Fargo actually offers extended warranty on cellphones if you pay your monthly cellphone bill with a Wells Fargo credit card. Never needed to use it yet, though (knock on wood).

Wells Fargo is the only one I believe who offers that I think.

 

[skinsone]

E

I hear you, I like to keep my phone for a few years.
But with the trade in program you're paying $375-500 to use the phone for a year. Pretty much renting it. And then handing it in and starting all over again.
It's a waste of money to me.

Exactly, more and more people are willing to give their money away for the privilege of "having" an item on trade-in or "loan"; using it for a determined amount of time only to "return/exchange" it for another item they want. It's a vicious cycle to be in because of wants vs. needs. And companies know this and encourage it to their advantage. They loan you a phone for a certain amount of time, and then get it back to resell to someone else. So they make money off you with the loan, and make money reselling the phone. Win-win for them.

With a vehicle lease, you can negotiate the final price. Phone companies, well you pay what they demand.

The only way to recoop the "free loan" payments is when the item is paid in full and it became your personal property to do as one wishes.

You never have personal ownership of a "loan" item, only the personal responsibility of maintaining it. If item is lost or damaged, you still owe the balance of loan.

Personally, when I purchase any item, the item is mine, not the banks. I don't finance anything including my home.

 

[kevink2]

Both financed and bought outright. Financed when I bought it. A couple of months later just knowing I owed money on it, even at 0%, annoyed me so I paid it off.

The main mistake of paying it off is, about once a month, I get offers from Verizon (or calls from the local store), telling me I'm eligible for an upgrade since it is paid off.
[doublepost=1497812470][/doublepost]Having a balance on the phone can be handy in some cases. Like the T-Mobile plan recently where they would pay off your device if you took it to T-Mobile. If you had the phone paid off, they wouldn't just give you $500 to go to them.

On the other hand, the current Sprint promotion. If phone paid off, and you wanted to take them up on the offer, it is much easier since you don't have to come up with the money in the short term.
[doublepost=1497812857][/doublepost]

Why do folks say doing the 24 month plan "locks" them in?

You can opt to pay it off if you want, and move.

It is an additional hoop you have to jump through. Especially if you want to use the phone on the new company, and it is locked. You either have to arrange to pay it off before porting, or you use a different phone, port, pay off the old phone on final bill, then unlock it.

And Apple works with the carriers to not sell the SIM free model at launch in the states. Which makes it harder to get a new iPhone at launch since they want to have it tied to a carrier. (And I'm aware of people taking advantage of loopholes, such as tying to a carrier like T-Mobile, then just buying it outright at the store).

 

[Applejuiced]

That's optional though. Really not much different compared to paying cash and buying a new phone every year. You still get hit with the first year depreciation. You just get maybe $100 more via DIY selling after fees, shipping, etc.

The big savings is in not updating your iPhone every year. Not which method you use to pay for the device (at least when comparing cash with 0% APR financing).



Wells Fargo actually offers extended warranty on cellphones if you pay your monthly cellphone bill with a Wells Fargo credit card. Never needed to use it yet, though (knock on wood).

From my experience it's about $100-180 difference than selling it on your own.
That's leaving too much meat on the bone for me.
[doublepost=1497814051][/doublepost]

With the trade in program, you have the option to trade up. If you want to keep it for a few years, you then have the OPTION to do so. At no extra cost to you. None.

So, if you are going to keep it longer than the 2+ years, that is fine. Still no reason to pay for it all up front. (except those that just like to do that for some personal/psychological reason. (there is no financial reason).

Yes but many just update every year thus basically renting their phone.
Not having outstanding bills and paying on a cellphone for 2 years doesn't make any sense to me. And since I can afford I see no reason to get a loan on my SmartPhone.

 

[Speechless]

Outright

 

[Applejuiced]

Afaik, Wells Fargo is the only card issuer that offers it. That certainly factored in when I was choosing whether to pay via credit card (paid off in full every month) or via carrier EIP.

I dont think wells fargo is the only credit card company that offers that incentive service. There's many credit card companies that have similar things.
My city card visa also has the same deal.
It adds another 2 years passed the manufacturers warranty.
That can save you some money not buying Applecare and also be covered for 3 full years instead of 2.
[doublepost=1497816222][/doublepost]

Wells Fargo is the only one I believe who offers that I think.

Think again, many credit card companies offer similar offers for their cardholders.
My Citi card also has an awesome service called price rewind. Anything you buy with the card they search for 3 months to see if there was a better deal for it and if they find one they credit your account for the difference.
[doublepost=1497817066][/doublepost]

You don't pay $650-950 upfront for the phone to begin with. On the 24-month EIP, with early upgrade at 12 months, trade-in value is effectively 50% of MSRP. Depreciation hit via carrier EIP trade-in is 50%. Not much different than, say, paying $750 for your phone cash, then after a year, selling/trading in for $375 and using the proceeds to buy a new phone.

You also pay for the full amount of sales tax as soon as you get the phone.
And lets say you upgrade a year later you pay for sales tax again for the full price of the new phone.
Think about that additional expense also.
Paying full sales tax on a device that you will only end up paying half of it and then keep paying sales tax every year if you upgrade yearly to the new phone. Not a good deal to me
You pay the sales tax and then they take it back and resale and make a profit off you.

 

[jr866gooner]

I'm trying to explain to my wife that by buying outright you save money.... she sees the idea of paying for a phone as ludicrous..

For me I'm paying £13 pm for 5gb data 2,500 minutes and ultd texts on sim only on an 19 month old phone. I paid 02 to leave and went sim only.

Now if I were to go down the contract route I'd be paying upwards of £50-£60 pm for the type of deal I have regarding data and of course the phone, not to mention there would likely be an upfront fee as well on top of that.

So my options would be pay £700 for the phone and then (let's say two years) at £13 pm on my ideal tariff . Or pay £200 upfront, pay £50-£60 pm for the next two years at least before being able to leave at no further charge.

I feel it's getting the phone payment portion out of the way to lower the ongoing monthly costs and keeping what is a fairly decent sim only deal being free to swap around if necessary.

I don't think I'm being unreasonable but any conversations about phones in my house get shot down in flames and destroyed. She's happy getting whatever phone her carrier provides for no upfront charge and decent data etc.

 

[nostresshere]

...You also pay for the full amount of sales tax as soon as you get the phone.
And lets say you upgrade a year later you pay for sales tax again for the full price of the new phone.
Think about that additional expense also.
....

I agree that if you sell/trade after 12+ months, you paid too much sales tax. Totally agree.

Help me understand. If you pay FULL price the day you get it, you pay full sales tax. Right?

So, again, why is doing a 24/30 deal so bad compared to buying it full price in the first place?

 

[Applejuiced]

I agree that if you sell/trade after 12+ months, you paid too much sales tax. Totally agree.

Help me understand. If you pay FULL price the day you get it, you pay full sales tax. Right?

So, again, why is doing a 24/30 deal so bad compared to buying it full price in the first place?

Correct, on the yearly upgrades you keep paying sales tax in full for a device that you basically rent for a year. Bad deal and you get no credit for half the sales tax when you hand it back in.
When you buy something you will obviously pay sales tax like everything else.
If you keep it and pay it off in 24-30 installments I didn't say it's a bad deal but it's dragging it for too long for me.
Personally I'd rather not finance a cellphone for 30 months.
What I do is charge it on my Citi card and pay it off in full when the statement comes in. I get points from the purchase that I can use for shopping at amazon. I get 120 days damage and theft protection coverage and also an extra 2 years of extended warranty after the manufacturers plan expires. That makes it a total of 3 years under protection plan coverage for my device.
How is that deal so bad?

 

[OriginalAppleGuy]

You guys really have me thinking about how my Citi card warranty benefits work now. Anyone actually have to go through a claim process with them yet?

 

[nviz22]

Bought mine outright through AT&T GoPhone for $185 after tax. I got it unlocked through them for free, so my 32gb Space Grey SE is my phone I use here and there.

 

[Tsuchiya]

I purchased my 7 Plus through the iPhone Upgrade Programme. Combined with my £6 p/m SIM-only plan, this option is still far more cost effective than any network contract for the same model.

 

[rui no onna]

I dont think wells fargo is the only credit card company that offers that incentive service. There's many credit card companies that have similar things.
My city card visa also has the same deal.
It adds another 2 years passed the manufacturers warranty.
That can save you some money not buying Applecare and also be covered for 3 full years instead of 2.
[doublepost=1497816222][/doublepost]

Think again, many credit card companies offer similar offers for their cardholders.

Talking specifically about the device getting extended warranty coverage when you pay via carrier installment plan as long as you pay the monthly cellphone bill with the credit card. Afaik, Wells Fargo is the only card issuer that offers that.

Hmm, gonna have to re-read the terms for the Citi card. My understanding was it just doubles your original warranty so you get two years instead of one.
[doublepost=1497862708][/doublepost]

From my experience it's about $100-180 difference than selling it on your own.
That's leaving too much meat on the bone for me.

The thing is carrier equipment installment plans don't actually prevent you from selling yourself. You can always pay off the device, get it unlocked and then sell on CL/ebay/Swappa/etc. if you prefer.

Interestingly enough, carrier upgrade programs probably offer better trade-in value for Android smartphones than you could get selling on your own.

Just saying the 0% APR carrier equipment installment plans/upgrade programs are not bad in and of themselves. Mathematically, they're the same as paying cash. The bad thing is when people who couldn't actually afford to upgrade their phones on a yearly basis do so because it's "only" $40 per month.

 

[Applejuiced]

Talking specifically about the device getting extended warranty coverage when you pay via carrier installment plan as long as you pay the monthly cellphone bill with the credit card. Afaik, Wells Fargo is the only card issuer that offers that.

Hmm, gonna have to re-read the terms for the Citi card. My understanding was it just doubles your original warranty so you get two years instead of one.
[doublepost=1497862708][/doublepost]

With this card Im using it adds another 24 months after the manufacturers coverage expires.
Its only on select Citi Cards I believe, not all of them have the same free extended warranty coverage.
Included with Select Citi® Cards
Warranties run out. We’ll add 24 months on your warranty. If your eligible item breaks, we‘ll repair, reimburse or replace the item up to the amount charged on your Citi card, or up to $10,000, whichever is less. To be eligible for coverage, you must pay for the item at least in part with your Citi card.


Shop with more confidence — Damage & Theft Purchase Protection may cover you for repairs or a refund if purchases made with your Citi card are damaged or stolen within 120 days of purchase

included with Select Citi®Cards

Shop with confidence. If you try to return an item you paid for in full with your Citi card within 90 days of purchase and the merchant won't take it back, you may receive a refund.

https://www.cardbenefits.citi.com/Products/Extended-Warranty

I sound like a commercial for them I Love this card.

 

[nostresshere]

....If your eligible item breaks, we‘ll repair, reimburse or replace the item up to the amount charged on your Citi card, or up to $10,000, whichever is less. To be eligible for coverage, you must pay for the item at least in part with your Citi card.

Shop with more confidence — Damage & Theft Purchase Protection may cover you for repairs or a refund if purchases made with your Citi card are damaged or stolen within 120 days of purchase...

Interesting. What is not clear is what is actually covered. Most iphone issues are DAMAGE and not BREAKAGE. It looks like damage (dropped phone, water,etc) is only covered for 120 days. Breakage in this case must be if the phone no longer works. Way less likely.

Having that extended warranty is good, but the more probably problem is not covered. Or at least how I am reading it.