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So why would you NOT buy a phone using an installment plan?

First, I agree that you shouldn’t buy something you can’t afford today. Mainly because people financing are doing so because they can’t afford it.

Second, free financing is how people make more money. Remember a $650 iphone today costs you more today than it does tomorrow, or next month due to your dollars being worth less every second into the future. So if you’re savvy, you pay the iPhone monthly and invest of the money you would have spent outright. At the end of the 2 years, the $650 iphone ends up costing you less because you invested money that earned for you and you end up paying the $650 that’s worth more today, into the future where it’s worth less.

Maybe this method nets you a few bucks and obviously not worth the hassle for only $650.. but that’s one way people make money. Free financing. If you can do with $650, you can figure out how to do it with 650k.
 
I try never to pay the list price EVER so I feel payment plans are not worth it for me even with no interest!
For instance, I got my release day iPhone 8 Plus for £100 cheaper than every where else here in the UK through a promotional offer
Guess I’m a bargain hunter!
 
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Stupid not to. Over time you technically paid less, thanks to inflation. And it improves your credit if your young and lack a credit history, just don’t default.
 
BenTrovato said:
First, I agree that you shouldn’t buy something you can’t afford today. Mainly because people financing are doing so because they can’t afford it.

Second, free financing is how people make more money. Remember a $650 iphone today costs you more today than it does tomorrow, or next month due to your dollars being worth less every second into the future. So if you’re savvy, you pay the iPhone monthly and invest of the money you would have spent outright. At the end of the 2 years, the $650 iphone ends up costing you less because you invested money that earned for you and you end up paying the $650 that’s worth more today, into the future where it’s worth less.

Maybe this method nets you a few bucks and obviously not worth the hassle for only $650.. but that’s one way people make money. Free financing. If you can do with $650, you can figure out how to do it with 650k.
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Yes, 0% financing is technically the way to maximize your every $$$, but some people don't want the overhead/hassle/whatever.

I don't feed the need to stretch out every dollar I have.

Do you pay for bargain toilet paper or gas? What about food?

See what I mean.
 
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mwhals said:
Paying an installment plan and then upgrading every year means you are always paying off a phone. It is a lot like leasing it and never owning it.
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but you can just keep it and pay it off when you want to. It gives you the option, but you don't have to get a phone every year.
 
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I never pay installments, always pay outright. Makes it easier to sell knowing there’s no balance and it’s unlocked, where as people who do installments and forget when they go to sell it to someone. When the bill doesn’t get paid the carrier blacklist it and shuts the phone down, leaving the new Person stuck with no phone and no money to get a new one It’s a hassle. Plus the company is going to get their money either way so I rather pay it all upfront, not increase my bill, and own it from day one.
 
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Saves me money and gives me freedom. If I do installment plans with a carrier, I'm forced to stick to that carrier. If I do Apple's IUP, I still have to get with one of the big 4 carriers for a month. Right now, I pay only $13 a month for my phone service. I also don't need a new phone every year. I'm hoping to be able to keep my 7 for a total of 3 years before I upgrade.
 
Complex757 said:
but you can just keep it and pay it off when you want to. It gives you the option, but you don't have to get a phone every year.
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I know that, because I have done it. I was referencing people that pay it and upgrade every year.
 
However, on some carriers like AT&T you must pay the tax upfront. So if you're buying the iPhone X for 999.99 you'll pay sales tax up front (let's say 10% to make it easy) which will be $100 in tax. But then you only keep the phone for 12 months, yet still owe half the price of the phone. So in the end you paid the tax on the FULL price, but you really only paid for half the price so they're beating you out of the tax money. Hope that makes sense.
 
andyACEcandy said:
Bleh, I was just wondering the reasons really.

Plan on buying it outright with my credit card to get the points/miles lol
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As long as you make the payments with the credit card, you will still get the miles. Just over a longer term.
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joeblow7777 said:
You still pay the full amount, if not more. If you have the cash and it’s not going to cause any financially strain, why not just get it over with and not have to worry about it? The phone will be fully yours and paid for, and not cost you another dime.
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With most savings/checking accounts paying essentially nothing, you aren't giving up any real money paying it up front.

Now, if you are paying interest on CC debt, the money you pay for the phone outright could have been used to pay off some debt, saving up to 20% annualized depending on the CC.
 
Buying outright or carrier financing is fine. Apple's little program isn't as that is on your CR and a hard pull every year from what I hear. IMO, Apple has to offer some incentives for that which could just be you're first in line on preorders or guaranteed a phone on launch day. That little headache gone could be worth it.
 
cardfan said:
Buying outright or carrier financing is fine. Apple's little program isn't as that is on your CR and a hard pull every year from what I hear. IMO, Apple has to offer some incentives for that which could just be you're first in line on preorders or guaranteed a phone on launch day. That little headache gone could be worth it.
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There is one hard pull the first year. Subsequent years, there is no pull as long as you kept your previous year's loan in good standing. I'm on my 3rd year of IUP and I only have had one hard pull from 9/25/15.
 
Mlrollin91 said:
There is one hard pull the first year. Subsequent years, there is no pull as long as you kept your previous year's loan in good standing. I'm on my 3rd year of IUP and I only have had one hard pull from 9/25/15.
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Even so you'll have a somewhat low credit line on CR with more than 30% balance which kind of dings down your score. But like i said, if Apple guaranteed me a phone on launch day, then i could be persuaded...lol
 
cardfan said:
Even so you'll have a somewhat low credit line on CR with more than 30% balance which kind of dings down your score. But like i said, if Apple guaranteed me a phone on launch day, then i could be persuaded...lol
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It doesn't get reported. It just counts as account. Balance doesn't appear.
 
Your phone would be LOCKED to T-Mobile and their plan.
If you out right buy it you can use it international with another local SIM card.
 
cardfan said:
Thanks for info. I had simply heard otherwise. Good to know on the balance.
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Yeah, it is literally one ding the first year, and nothing else. I take great pride in keeping my credit report clean, so I would be the first one to dump IUP if it adversely affected my credit.
 
OneMike said:
This is a really old thread, so not sure why bumped. The same principles apply though.
...
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Because the $1000 iPhone has arrived. You know when a salesman quotes you a big nice round number, you know it is "made up" and inflated. That's what the iPhone X seems like to me. Should really be $650.

Back on topic, a reason to buy your phone out right instead of financing is to force mobile carriers to compete and lower prices. If they know your phone is unlocked and paid for, that means you can switch carriers anytime.
 
PorscheDude said:
buy iphone through newegg = no sales tax on what will eventually be $600+.
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good idea never would have thought of
i cked out newEgg and they seemed expensive tho

compared to meeting up with someone off craigslist at the local Verizon store
 
On ATT Next, could I get the iPhone 8 Plus and then switch to iPhone X in a couple months? Would the monthly payment just go up to the price of the X, or, would I have to pay off the 8 Plus to be permitted to get the iPhone X? Thanks!
 
legaleye3000 said:
On ATT Next, could I get the iPhone 8 Plus and then switch to iPhone X in a couple months? Would the monthly payment just go up to the price of the X, or, would I have to pay off the 8 Plus to be permitted to get the iPhone X? Thanks!
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You would need to pay off the iPhone 8 in order to upgrade early.
 
I wanted to just buy our phones outright, but T-Mobile's $300 trade in is distributed as credits over the term of the Equipment Installment Plan.
 
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