Other Do you think 24 month financing on phones is detrimental to people?

Discussion in 'iPhone' started by tonybarnaby, Apr 14, 2018.

  1. tonybarnaby macrumors 6502

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    Dec 3, 2017
    #1
    I personally think that being able to finance a phone over 24 months leads people to over spend and not even realize what they’re doing. $4X per month on a phone sounds very reasonable, but a lot of people don’t realize what they’re truly spending. No interest is good, but if the only way you can afford it is over 2 years, I don’t think it’s a smart decision.

    I have nothing against people getting what they want, but this culture is already buried in debt. I think it’s a detriment to people. Not sure what the solution is, because I also don’t think it’s right that the only people who can have an X should be those who can pay cash. If people stopped paying $1k, prices would drop. The fact people have no problem paying over 24 months for a phone is great for Apple and other high end phone makers.

    My personal motto is to never buy anything I can’t afford in cash. The only 3 exceptions are my house, vehicles and my kids college education.

    Am I wrong? Maybe boltjames is right and the X is #premium and only for the best and brightest haha.
     
  2. Relentless Power macrumors Core

    Relentless Power

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    #2
    I think there are a lot of consumers that can’t afford a $1000 iPhone. But for the majority who can afford a the iPhone X for example, its an easier transition to pay over the course of time because its more manageable Versus spending a $1000 upfront.

    Also, Some consumers would rather pay the device off over time because they don’t have intentions of owning the iPhone, where they can upgrade after a certain point to the latest device.
     
  3. appleguy123 macrumors 604

    appleguy123

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    #3
    It’s a zero interest loan with a chance to painlessly upgrade every year. Assuming that your income is stable (i.e. it’s not a situation where you can afford $50 a month now but maybe not in a few months), it is the most rational way to purchase the iPhone (if you want AppleCare). You save the cost of inflation, and you get to use the money you have to buy the iPhone outright for investment or an interest bearing account.
     
  4. smallcoffee macrumors 65816

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    #4
    I'd say you're wrong but it depends. There's no financial reason to not finance the purchase, even if you were a multi-millionaire. Just having that cash sit in the bank (1.5% at Goldman) makes it worth it, let alone saving it for some other purchase.
     
  5. eyoungren macrumors P6

    eyoungren

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    #5
    If I adopted your personal motto I would either never own anything worth owning, consistently be 10 years out of date or own nothing but used goods.

    Being able to buy cash would be great but there's not enough time to save up before whatever it is is old enough to be thrown away by a majority of consumers.

    There are reasons I own 12 to 18 year old Macs and one of those is price.
     
  6. Ffosse macrumors 65816

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    #6
    It's easier to just pay upfront; this is what I have always done with my phones - that way they have all been unlocked and I can go with whichever sim I want.

    If someone can't afford something it's best not to get into debt.
     
  7. MacDawg macrumors Core

    MacDawg

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    #7
    It is a personal decision and one size doesn't fit all
    Everybody has their own reasons for their choices and trying to fit everyone into the same experience is ill advised

    People do a lot things that I think are stupid, unwise, ridiculous, but it is their life and their choice
    And I do a lot of things that others think are also stupid, unwise and ridiculous
    They should mind their own business and stay out of mine
     
  8. hvfsl macrumors 68000

    hvfsl

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    #8
    Lets say you save 3 years to a buy a Mac, by the time you actually went to buy it, it would be 3 years more advanced than if you bought it on credit when you started saving. Plus you are also saving money in the long run by not paying the interest on the loan. Besides, there is nothing wrong with getting second hand. I was able built a VR capable gaming PC using parts off eBay for a fraction of the price of getting new.
     
  9. SnyG macrumors member

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    #9
    Is this another one of those thinly veiled attempts to sneer at people the likes of OP deem less fortunate than themselves? How exciting.
     
  10. smallcoffee macrumors 65816

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    #10
    Eh, if that's the case then that's stupid. I make a lot of money and I still financed my Mac even though I could have bought it with cash. There's no reason to not do it at 0% interest.
     
  11. joeblow7777 macrumors 603

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    #11
    For better or worse, society is built around people spending money that they don't actually have. Global debt is at a record $233 trillion.

    It's ridiculous when you think about it. All money and resources obviously come from this world, but somehow the world as a whole is in debt.

    But you're not wrong. Many people can and do manage debt responsibly, but many people would avoid a lot of problems if they limited themselves to only buying what they can actually afford. Being a few years behind in tech isn't as bad as having no savings because most of your pay is going to loans, credit cards, and installment plans every month.

     
  12. bruinsrme macrumors 603

    bruinsrme

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    #12
    I know people that spend more on pot/alcohol a week than I do a month on a phone.
     
  13. smallcoffee macrumors 65816

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    #13
    Or because you just spent that entire savings all at once instead of spreading it out over the course of two years?

    It's more responsible to have the cash on hand if something comes up.
     
  14. dogslobber macrumors 68030

    dogslobber

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    #14
    First two yes, the latter they can pay for themselves.
     
  15. BasicGreatGuy Contributor

    BasicGreatGuy

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    #15
    I don’t care what others do. I only care about being fiscally responsible for that which I am responsible for.
     
  16. joeblow7777 macrumors 603

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    #16
    If buying something outright means using your entire savings that's obviously not responsible either. You know, simply living without the latest iPhone is an option too...

    There's not really a one size fits all financial plan, so I'm not saying never buy something on installments or take out a loan. But a lot of people don't really think about how it all adds up and they end in a bad situation.
     
  17. dogslobber macrumors 68030

    dogslobber

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    #17
    Why are you in here if not to answer the OP’s question?
     
  18. MacDawg macrumors Core

    MacDawg

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    #18
    That IS my answer to the OPs question, he should stay out of other people's business
     
  19. tonybarnaby thread starter macrumors 6502

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    #19
    People who have to pay 24 monthly installments are the very reason phones are so expensive these days. Back in the day you needed a minimum of 20% down on a house. Then they invented FHA @ 3.5%. One of the reasons for the housing market crash was people in a house they could not afford and ended up defaulting on.

    If people had to pay cash for phones, there would be no $800+ phones most likely. Very few people are willing to drop that much at one time, but even someone making $10 an hour can afford $50 or less for a phone installment plan. In that case, I believe phone prices wouldn’t be so ridiculous.

    It’s not my business what people make or how they spend their money, but it’s a sad sign when financial responsibility is so lacking now days. People always talk about how 24 month payment plans are fine because it frees up money for investing or something else. That’s fine, but the vast majority of people who are on 24 month plans do so because they can not afford what they are buying, period. I’m not ripping anyone personally, but that’s a recipe for issues later down the line. And everyone is paying the price for it with the current cost of any premium phone from the note 8 to the pixel 2xl to the iPhone X.
    --- Post Merged, Apr 14, 2018 ---
    I’m definitely frugal and go without some things, but I never have to scramble when an emergency comes up and start selling things on eBay like a crackhead to pay for it. There are pros and cons for sure.
     
  20. kupkakez macrumors 68000

    kupkakez

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    #20
    I see nothing wrong with 0% interest loans/credit cards as long as you are responsible with them. Don't bite off more than you can chew and will make sure they are paid off before interest starts accruing.

    For me, I stick with the Apple Upgrade Program as I know I'll upgrade every year and I hate the hassle of selling my phone to get the new one.
     
  21. danny842003 macrumors 6502

    danny842003

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    #21
    If people didn’t have these contracts you wouldn’t have these devices. Do you think Apple, Samsung etc would be able to pay the R&D bills from the people who just pay cash?
     
  22. MICHAELSD macrumors 68040

    MICHAELSD

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    #22
    No, people have been basically doing this for years without realizing it. 24 months is the expected modern lifetime of a phone anyway.
    --- Post Merged, Apr 14, 2018 ---
    Plus as others pointed out it’s 0% interest. Phone carriers are really doing them a favor. You can invest that $1,000 and come out ahead.
     
  23. MacDawg macrumors Core

    MacDawg

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    #23
    If you really want to uncover the reason for the high cost of iPhones, you need look no further than the folks who repeatedly return multiple perfectly good phones over their unreasonable and obsessive demands for a pristine, perfect phone and those who purposely damage their phones and batteries to scam a system designed to protect consumers.
     
  24. Apple fanboy macrumors Core

    Apple fanboy

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    #24
    I pay £13 a month for my phone contract. I have always paid cash for an unlocked iPhone on launch day. Then I sell it when I buy the next one, which pays for a chunk of it.

    If people want to finance a phone that's their business.

    However if you can't afford the latest and greatest, do you really need it?

    Mostly though I work with people who moan they can't afford a deposit for a flat or house.
    But they lease a car, lease an iPhone and spend a good chunk each week on coffee at Starbucks etc.

    Me? I made buying a house my priority because I need a house. I don't need the latest and greatest gadgets.
    Now I can afford them, I buy what I want.
    But there is a big difference between need and want. Most people don't understand that!
    --- Post Merged, Apr 14, 2018 ---
    Like I returned a white for a black one? Yes annoys me to.
     
  25. gurase macrumors regular

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    Oct 12, 2015
    #25
    I think people find it easier to justify a purchase with a payment plan, or if the monthly payment is “not much more” than what they are currently paying.

    For example....say you’re paying $35/month for a phone. You’re pretty happy with it even when the next model comes out. But the next model is “only” $5 more a month, so you upgrade. Forgetting that had you held onto your current phone, it would be paid off and you’d have NO payment.

    The phone payment has become a permanent fixture in some people’s budgets. I don’t really care how someone chooses to spend their money, and I know plenty of people will upgrade every 1-2 years anyway whether they pay up front or not. But holding onto a perfectly capable phone for longer than 2 years would be much more common without payment plans.
     

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