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

[puma1552]

Yet on another topic, a newly graduated college grad mentioned he didn’t know how to balance/reconcile a checkbook.

Interesting.

I don't think there's anything interesting about that, why should they know how to balance a checkbook? I am 34 and I know how, because it was commonplace when I was 16-20 years old because there was no online banking or online bill payments, and checks were a normal form of payment. But by the time I was 20-22 that stuff melted away and about the only place you can even use a check anymore is the DMV or the grocery store (if you so choose, which nobody does). The DMV is the only place I use a check these days just because they charge a lame fee for using a card, but you CAN finally use a card at the DMV also.

I certainly wouldn't expect a 22 year old in 2018 to be able to balance a checkbook, it's an utterly useless skill at this point.

 

[elf69]

Almost all my phones been 24 month contracts.
I started PAYG but was cheaper to go contract.

And in UK at end the phone is mine and I usually sell them on.
I get my phones at three or carphone warehouse as they are unlocked from the start.

My current phone mate 9 was £579.99 to buy upfront. Spread over 24 months is £24.16 per month.
This of course is just the phone and does not include any minutes/data/texts.

I have the phone on contract and it is £39 a month, yes quite high. I have 2gb data (which i rarely use as wifi everywhere) and unlimited texts/calls.

I can not afford the phone outright and then a pay as you go sim to get same deal.
I am in position to afford the contract comfortably.

Although on my renewal I will be lowering my tariff as no longer need as much text/calls.

 

[nburwell]

If I was forced to pay $999 up front for the X, I would have most likely opted for the 8 or an Android device. I do have the cash to easily pay for the X, but I would much rather have that money sit in my bank accounts. Thus, I agree with some of the responses that people have made about payment plans for phones. I also liked the fact that I put $280 down upfront on the X in order for the monthly payments to be somewhat reasonable. Granted I pay $86/month with T-Mobile and that is with $30/month payment for my X.

Everyone's situation is different. It's ultimately up to each individual the choices they make with their money. So if a person purchases the X and then a few months later, they have medical expenses they have to pay for, which results in them selling their X, well that was a decision they made when they bought the X initially.

 

[The-Real-Deal82]

I do find it bizarre how this is such a hot debate? If you want to pay for your phone upfront in full then fabulous. If you want to pay a contract over 24 months and own the phone at the end then fabulous.

It’s all much of the same but using a different method. For me a contract is more convenient and I opt to do that. I’m not going to act superior or tell anybody else how to finance their phone because there is no correct way of doing it as it’s personal preference.

 

[Raist3001]

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

Seems to be. Otherwise, no one's business how they spend their money.

 

[bevsb2]

I certainly wouldn't expect a 22 year old in 2018 to be able to balance a checkbook, it's an utterly useless skill at this point.

I'm an older person and a recent convert to online banking which I love, but I still see a need to keep and be able to balance a checkbook. My available balance online is dependent on checks that have been cashed. I still need to keep track in a checkbook to easily know how much I actually have available at any given time.

 

[estabya]

My two cents:

I definitely think the 0% financing option results in people buying phones they can’t afford, but that doesn’t mean it’s necessarily a bad thing for everyone.

What I have done for both my wife and myself since the 5S is finance the phones up front, pay for them monthly, and then when one of us decides we want to upgrade I either pay the remainder of the balance and sell private party or trade the phone back, whichever makes more sense from the financial and convenience perspective. It works out well because I tend to upgrade every year, and she does every 1.5 years on average.

While I could pay for the devices up front, I like the flexibility and convenience that the 0% financing offers.

 

[puma1552]

I'm an older person and a recent convert to online banking which I love, but I still see a need to keep and be able to balance a checkbook. My available balance online is dependent on checks that have been cashed. I still need to keep track in a checkbook to easily know how much I actually have available at any given time.

Writing checks is your problem. Eliminate that and the archaic need to balance a check book goes out the window with it.

 

[MacDawg]

I'm an older person and a recent convert to online banking which I love, but I still see a need to keep and be able to balance a checkbook. My available balance online is dependent on checks that have been cashed. I still need to keep track in a checkbook to easily know how much I actually have available at any given time.

Totally agree and I do the same

Writing checks is your problem. Eliminate that and the archaic need to balance a check book goes out the window with it.

Substitute "payments" for checks.
I use online bill pay exclusively and haven't written a check in years and years, because I make my payments online.
But as @bevsb2 says, the available balance online does not reflect payments that have scheduled or checks not cashed.
For instance, I use online bill pay to pay my rent, which is mailed to my landlord and I schedule that payment well in advance.
I keep up with everything in Banktivity (like a checkbook register) so I know how much is in my account and what has been scheduled to pay as well.
And I regularly reconcile my records with the bank (which has been wrong in the past).

 

[puma1552]

Totally agree and I do the same



Substitute "payments" for checks.
I use online bill pay exclusively and haven't written a check in years and years, because I make my payments online.
But as @bevsb2 says, the available balance online does not reflect payments that have scheduled or checks not cashed.
For instance, I use online bill pay to pay my rent, which is mailed to my landlord and I schedule that payment well in advance.
I keep up with everything in Banktivity (like a checkbook register) so I know how much is in my account and what has been scheduled to pay as well.
And I regularly reconcile my records with the bank (which has been wrong in the past).

Right, I get tracking your purchases online, as I and likely everyone else does the same and I make sure what I spend or pay for comes in over the next few days...but that's considerably different than sitting down once every month with an envelope full of canceled checks and doing a major balancing of a check book oldskool style and looking at what is and isn't cashed from an entire month, IME. Pretty much with the exception of gas, almost all things I pay for show up instantly online so there's no need to try and remember everything or track everything.

Anyway, to each their own.

 

[Apple fanboy]

Writing checks is your problem. Eliminate that and the archaic need to balance a check book goes out the window with it.

I had to get my boss to sign a cheque today as a supplier had sent some goods where we had to pay the import tax (normally this just gets done online, but they had checked the wrong box!). First one he'd signed in years.

 

[ftaok]

regarding "balancing a checkbook". I think at this point, it's just semantics. Whether folks are writing checks or using online billpay, it's really all the same.

And I know tons of people in my generation (mid-40s) that couldn't balance a checkbook. These folks can't be trusted to keep their online balance in order today.

Just like there are tons of millennials that can keep track of their online balance, there are tons that can't.

Some people are good at tracking their money and some people aren't. Has nothing to do with age/generation.

 

[bevsb2]

Writing checks is your problem. Eliminate that and the archaic need to balance a check book goes out the window with it.

I hope you have overdraft insurance.

 

[puma1552]

I hope you have overdraft insurance.

I do, but I don't need it and never have needed it because like I said, online banking and online transactions completely eliminate the need to be in the dark for a month at a time regarding what's in and what's not and where everything falls against paydays. Online transactions show up instantly or at most within a couple days (and will usually at least show a pending authorization for $1 so you at least know something from vendor X is to be accounted for), not up to one month later like a paper check. I also typically keep enough money in the bank to not need to worry about that anyway.

Clinging to old ways or not, my point still stands that expecting a 22 year old to know how to sit down once a month and balance a check book in 2018 is absurd because it's an outdated payment form that has been rendered entirely obsolete with technology. It's absurd to expect a college kid to know how to do this if for no other reason whatsoever than checks are just flat out not accepted at 99% of businesses so it's not a viable payment method in today's world.

Anyway, carry on folks.

 

[smallcoffee]

I do, but I don't need it and never have needed it because like I said, online banking and online transactions completely eliminate the need to be in the dark for a month at a time regarding what's in and what's not and where everything falls against paydays. Online transactions show up instantly or at most within a couple days (and will usually at least show a pending authorization for $1 so you at least know something from vendor X is to be accounted for), not up to one month later like a paper check. I also typically keep enough money in the bank to not need to worry about that anyway.

Clinging to old ways or not, my point still stands that expecting a 22 year old to know how to sit down once a month and balance a check book in 2018 is absurd because it's an outdated payment form that has been rendered entirely obsolete with technology. It's absurd to expect a college kid to know how to do this if for no other reason whatsoever than checks are just flat out not accepted at 99% of businesses so it's not a viable payment method in today's world.

Anyway, carry on folks.

I agree. It doesn't really make sense. You have a bank account and you can check how much you have any time. Would you balance a checkbook in a video game? No? Why not? Same reason you don't in real life anymore - you know exactly how much money you have unless you're incredibly irresponsible.

 

[tonybarnaby]

If there was a choice between free/deferred financing, and paying the same amount in cash, paying cash would be idiotic from a financial perspective.

Obviously. This is more geared to people who can’t afford something unless they spread it out 24 months. Companies are making it too easy to bury yourself in debt.

 

[puma1552]

Obviously. This is more geared to people who can’t afford something unless they spread it out 24 months. Companies are making it too easy to bury yourself in debt.

I guess I don't really see the difference, to be honest. If someone can afford it up front, great, if they can afford it on the 0% payments, great. Same thing really, considering it's 0%. Doesn't really matter if they have that $1000 sitting in the bank or not. This isn't like being upside down $10k on a brand new car if you lose your job and have to sell the car and literally cannot because of the huge negative equity that you would need to come up with the cash for just to get rid of it, we are talking about a pretty small ticket item in the grand scheme of things.

 

[bevsb2]

I do, but I don't need it and never have needed it because like I said, online banking and online transactions completely eliminate the need to be in the dark for a month at a time regarding what's in and what's not and where everything falls against paydays. Online transactions show up instantly or at most within a couple days (and will usually at least show a pending authorization for $1 so you at least know something from vendor X is to be accounted for), not up to one month later like a paper check. I also typically keep enough money in the bank to not need to worry about that anyway.

Clinging to old ways or not, my point still stands that expecting a 22 year old to know how to sit down once a month and balance a check book in 2018 is absurd because it's an outdated payment form that has been rendered entirely obsolete with technology. It's absurd to expect a college kid to know how to do this if for no other reason whatsoever than checks are just flat out not accepted at 99% of businesses so it's not a viable payment method in today's world.

Anyway, carry on folks.

Maybe semantics are the problem here. I'm not keeping track of checks once a month, just my balance. I do use online checking when possible but sometimes it's not practical such as when writing a check for a one time donation. Some of my online payments are not cashed within a couple of days. Once I write a check or make an online payment I consider that money gone and don't need to see when it is cashed, but I do like to see at a glance what my real balance is even though I also typically keep enough money in the account to not worry.

Until recently I have written checks to many businesses and have never had one refused. While balancing a checkbook is not a major intellectual challenge, I wouldn't expect a 22 year old who has never done it to know how or need to know how to do it.
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I guess I don't really see the difference, to be honest. If someone can afford it up front, great, if they can afford it on the 0% payments, great. Same thing really, considering it's 0%. Doesn't really matter if they have that $1000 sitting in the bank or not. This isn't like being upside down $10k on a brand new car if you lose your job and have to sell the car and literally cannot because of the huge negative equity that you would need to come up with the cash for just to get rid of it, we are talking about a pretty small ticket item in the grand scheme of things.

For people living close to the edge, a $1000 phone may be a big ticket item. I think the OP was just questioning if making it easy to buy the latest and greatest that you really can't afford is creating a problem. Clearly paying monthly for something with 0% interest is just a choice for others. The fact that there is substantial credit card debt in the US suggests that the OP's question may be reasonable.

 

[eyoungren]

Not knocking your ideas on finance, but for me if i can't afford to pay cash for something i don't buy it. period.

And I don't begrudge anyone who can afford it, or who can afford to wait and then get in a reasonable time.

That just isn't my financial situation. Wish it were.

 

[C DM]

I buy my phones upfront now but really don't see much difference between the NEXT plan and how most of us purchased phones a few years ago when they were subsidized. You signed a 2 year contract with a carrier which included a subsidized phone and a steep penalty for dropping out early. You didn't really "own" those phones either until the contract was fulfilled.

That's more or less it. These days with financing programs they sometimes offer similar incentives to keep you around and basically paying off the whole thing before upgrading in the form of a monthly discount that is there for the duration of the financing term.

So, for example, they would offer a new phone for a discounted rate of just $10/month, but it would be in the form of the phone actually being $30/month with a $20/month discount for 24 months. Which means to make the most of it would be best to just keep paying monthly for 24 months. More or less like getting a subsidized phone with a contract.

Something like that makes 0% financing a better deal compared to paying upfront if you don't really plan to leave your carrier and don't really upgrade until two or more years down the line.

 

[craigio85]

im beginning to wonder if being 10 years out of date would be a good thing.... I think the problem is people buy the newer shiner things when the thing they have hasn't even been used to its full capacity for long. Vehicles are one thing that I feel people turn over way too fast. Phones are #2.

(i have one phone on the upgrade program and the other is paid for. whenever i get that $45 charge to my card I think dang this is dumb) --the phone i speak of is my wives BTW i do not carry two
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I happen to agree however im on the buy a vehicle with cash side.... (the vehicle has to be carefully considered of course and within the cash budget)
[doublepost=1523819643][/doublepost]

now i officially realize why people are so far in debt........ How old are you?

Do not patronise me. And try reading/quoting my entire post rather than quoting the sentence out of context that suits you best. If you had, you’d have seen that I was talking about people taking personal responsibility for their commitments.

I am 32, perfectly in control of my finances and my assets far outweigh my liabilities thank you very much.
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I'm also in the UK. I have 2-3 years salary in savings so I think I'm ok.
When I was made redundant I was only out of work a few weeks. Given I'd been in my previous position 10 years, I did very well out of it.
But the fact that I was living debt free meant I had no sleepless nights over it.

Exactly what i’m saying - it’s about people being astute enough to know what they’ll do in an emergency.

But most people aren’t debt free as they have at least a mortgage - hence the need for insurance.

 

[Raist3001]

Question is, why are so many people equating financing with affordability? If someone chooses to finance, it does not follow that this person is unable to afford the phone.

 

[Apple fanboy]

Do not patronise me. And try reading/quoting my entire post rather than quoting the sentence out of context that suits you best. If you had, you’d have seen that I was talking about people taking personal responsibility for their commitments.

I am 32, perfectly in control of my finances and my assets far outweigh my liabilities thank you very much.
[doublepost=1523962765][/doublepost]
Exactly what i’m saying - it’s about people being astute enough to know what they’ll do in an emergency.

But most people aren’t debt free as they have at least a mortgage - hence the need for insurance.

Given what I heard on the news this morning I doubt most people have a mortgage! Apparently quite a few will never get to own their own home (but probably have the latest iPhone! )

 

[The Game 161]

Given what I heard on the news this morning I doubt most people have a mortgage! Apparently quite a few will never get to own their own home (but probably have the latest iPhone! )

Suppose techinally you never own your own home until that mortage is paid off anyway

 

[The-Real-Deal82]

Question is, why are so many people equating financing with affordability? If someone chooses to finance, it does not follow that this person is unable to afford the phone.

I find it strange too? I’ve seen this rationale on forums before where people assume those who have contract phones can’t actually afford the phones, it’s complete tripe.

If you can afford the monthly contract tariff, you can afford the phone. It’s simple mathematics.