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Why do people still have contracts?

Nikomanz

Nikomanz

macrumors regular
Original poster
Mar 9, 2012
129
6
Washington, D.C.
I'm honestly just curious. I'm an international student here at the U.S. so I have to have an unlocked phone because I move from country to country.

If you have a family plan, or more than one line, a contract is naturally the better choice because of all the money you save. But I don't think it's the same for individual lines.


Here's my argument:

-I bought my iPhone 5c 16gb unlocked 8 months ago with Paypal Credit 6 month no interest financing for $420. I ended up paying it entirely within the first few months and I had a great iPhone unlocked. I even ditched AT&T because they were rude to me and picked up T-Mobile in the same day seamlessly.

- When I really wanted the iPhone 6, I listed my 5c on eBay and it sold immediately for $320.

- I used the $320 and made a downpayment on the iPhone 6 which I paid for using Apple 24 month no interest financing (900 - 320 = 580. 580 / 24 = $24 a month + any service fee) I use T-Mobile which gives me 3Gbs of data for $60 bucks + the 24 payment to Apple it comes out to $84 a month. The same single plan on a contract with a locked phone with At&T comes out to $104 a month! (104 - 84 = 20. 20 x 24 = $480 in savings in two years! And thats having an unlocked phone I can use worldwide.

- Whenever a new phone comes out I'll just wash, rinse and repeat. I basically get very good upgrades at very low payments per month and I end up saving a lot and upgrading at will. Whenever a carrier starts sucking I just switch.


I'm not criticizing anyone's lifestyle or choices. I'm just curious to see if people have reasons to stay in these contracts, with frankly draconian terms, when being contract free (with any carrier, doesn't have to be T-mobile) seems to be have better things going for it. What's your opinion?


Carriers don't tell me what to do, and AT&T or any other network won't screw me over. I laugh whenever a service representative tells me I have to this or that in order to keep their service. I have a phone that works on any worldwide GSM network and everytime a new phone comes out I'm days away from upgrading and even saving money on it.
 
tapping my watch waiting for grandfathered AT&T unlimited data 'pull it from my cold head hands' guy.....
 
I've got an iPhone 6 and a 6 Plus bought outright. I am also on a Three contract.

What's your point?
 
I guess some people don't have the ability to, or don't want to, stump up the full price at the start.

I personally buy the phones outright, and have my old Three contract sim-only plan. It works out cheaper over the 24 months to do it that way.
 
I have always had a contract and I sell my phones too. One year I sell it and buy the new phone outright and then the next year when my contract is up, I sell my phone again and use that money towards my new phone which is discounted so I even have some leftover money, I have an individual line and I only pay $60 with verizon right now.
 
Some can't afford to buy the phone outright and don't like to use credit. A contract is probably the credit facility that doesn't make it seem as though you are using credit. You kind of aren't, since you pay a month in advance when you take out the agreement. It's also good for the bundle of minutes, texts and data; you can get that on a PAYG MVNO, but there are some that won't move away from the major networks.
 
jpeg42 said:
Dude.... three threads down :
https://forums.macrumors.com/threads/1790501/
Click to expand...

Dude.... I made an all contracts thread, not just ATT.

----------
*~Kim~* said:
Some can't afford to buy the phone outright and don't like to use credit. A contract is probably the credit facility that doesn't make it seem as though you are using credit. You kind of aren't, since you pay a month in advance when you take out the agreement. It's also good for the bundle of minutes, texts and data; you can get that on a PAYG MVNO, but there are some that won't move away from the major networks.
Click to expand...

That's a very good point you made, but you have to agree that the payoff is that you do enter in a contract which will limit you. I think in the future these major networks are going to suffer if they keep disregarding the consumer as much as they have had in recent years.

----------
gabo864 said:
I have always had a contract and I sell my phones too. One year I sell it and buy the new phone outright and then the next year when my contract is up, I sell my phone again and use that money towards my new phone which is discounted so I even have some leftover money, I have an individual line and I only pay $60 with verizon right now.
Click to expand...

Thats a pretty good deal you have with Verizon for only $60 a month. Do you have to resell them at a lower price because they're Verizon tied, or do you sell your phones at a higher rate regardless?
 
mantan said:
tapping my watch waiting for grandfathered AT&T unlimited data 'pull it from my cold head hands' guy.....
Click to expand...

Yep, I used to be the same. That was until I needed to watch some online streams for work while out of town. Soon as that "unlimited" hit 5 gigs I could barely check email with the throttle.

Moved my 3 lines to a 10GB NEXT plan. Saved over $100/mo on the service. Sure, adding back 2 NEXT iPhones nearly brought the monthly bill back to where it was but now I can get a new phone every year and I finally have a hotspot. :)


:apple:
 
I have always found direct purchases to be a lot cheaper... I picked up the 6 on my CC and converted it to interest free instalments for 6 months... Again I will be putting the EMI conversion request for the amount on the last day of my billing cycle so that the first instalment will be added to the next bill and payable 50 days after that... :D

p.s.: Not that I have the option of a contract in my country in the first place... But, this is what I have done for my brother, who lives in the states, too...

*~Kim~* said:
Some can't afford to buy the phone outright and don't like to use credit. A contract is probably the credit facility that doesn't make it seem as though you are using credit. You kind of aren't, since you pay a month in advance when you take out the agreement. It's also good for the bundle of minutes, texts and data; you can get that on a PAYG MVNO, but there are some that won't move away from the major networks.
Click to expand...

A contract is the same as taking credit but, guised differently... You pay installments with interest...
 
FriednTested said:
I have always found direct purchases to be a lot cheaper... I picked up the 6 on my CC and converted it to interest free instalments for 6 months... Again I will be putting the EMI conversion request for the amount on the last day of my billing cycle so that the first instalment will be added to the next bill and payable 50 days after that... :D

p.s.: Not that I have the option of a contract in my country in the first place... But, this is what I have done for my brother, who lives in the states, too...



A contract is the same as taking credit but, guised differently... You pay installments with interest...
Click to expand...


This! I'm glad to know we're on the same page.
 
These contract / non contract discussions for the most part, ignore the amount of dats consumer for the low end consumer. We only use 2GB a month so that contract was cheaper by about $200 per iphone 6. However the savings are very marked with Verizon Edge with 10GB of data.
 
Last edited:
I still don't get your point. Most people shop around for the best deal and resell "old" phones. It's nothing new.
 
Nikomanz said:
-I bought my iPhone 5c 16gb unlocked 8 months ago with Paypal Credit 6 month no interest financing for $420. I ended up paying it entirely within the first few months and I had a great iPhone unlocked.

- When I really wanted the iPhone 6, I listed my 5c on eBay and it sold immediately for $320.

- I used the $320 and made a downpayment on the iPhone 6 which I paid for using Apple 24 month no interest financing (900 - 320 = 580. 580 / 24 = $24 a month + any service fee) I use T-Mobile which gives me 3Gbs of data for $60 bucks + the 24 payment to Apple it comes out to $84 a month. The same single plan on a contract with a locked phone with At&T comes out to $104 a month! (104 - 84 = 20. 20 x 24 = $480 in savings in two years! And thats having an unlocked phone I can use worldwide.
Click to expand...

Looks like you did not include your payment for the 5C, which I guessed closed to $600 ($550 + tax). Don't remember the exact price, but if it was $100 less then 5S then it should be $550 for the 16GB.

Your total cost for Y1 = $600 + $60x12 (for simplicity, assuming you stayed with TMobile) = $1,320
Total cost for Y2 with the upgrade = $900 - $320 + $60x12 - $290 (the amount you still have to pay to Apple for the remaining 12 months of your financing plan) = $1,010 (assuming if you want to upgrade at the end of Y2 and sell your phone, you will have to pay off your debt to Apple, that's why I showed the price of the phone was $900 - $290).

Your total cost in 2 year would be $2,330.

With a 2yr contract with Verizon, if I go with a 5C in Y1 and upgrade in Y2
Y1 Cost = $100 + $60x12 (Verizon is offering a single line plan for $60/month with 2GB of data) = $820
Y2 Cost = $900 - $320 + $60x12 = $1,300

Total cost in 2 years = $2,120 and you' will be eligible to upgrade to a new phone at the end of Y2 at a discounted price and will have already paid of your phone. In your scenario, at the end of year 2 you still owe Apple $290 and will have to pay full price for a new phone if you want to upgrade.

Also since the 5S all Verizon came unlocked no matter if you're under contract or you buy it out right w/o contract. So you could use it with whichever carrier you want if you're willing to pay $350 early termination fee or less, depending on how long you stay with Verizon
 
I agree in Canada the CRTC kicked the carriers butts and the carriers are mad, now for 2 year contracts they are only eligible for select Share Everythign Plans so its imposibble to get a substadize phone for a single plan unless you want a brtual price

I pay $66 for

6GB Data
250 anytime minutes(more than enough for me)
Unlimited Evenings and Weekends (evenings start at 5pm)
Unlimited messaging
Call Display
Visual Voicemail

for me to go on a new 2 year contract I would have to change to a "new" plan that would be $125 for

6GB Data
Unlimited Calling Coast to Coast (Canada) which is pointless for me I do not use long distance and I dont use the 250 day time minutes I have now
Unlimited messaging
Call Display
Visual Voicemail
 
By purchasing on contract you can still

- move to a new carrier (just cancel service and pay off device)
- sell your phone
 
mantan said:
tapping my watch waiting for grandfathered AT&T unlimited data 'pull it from my cold head hands' guy.....
Click to expand...

Here I am! :D If you are on a single line that is grandfathered with AT&T's unlimited data then it often makes sense to continue with the traditional 2 year contracts. You don't get a service discount on that plan anyway, so the subsidy is already built in and can't be recovered.

Even if you consider the unlimited plan to actually be a 5GB plan--for me its still considerably cheaper than the other options out there. Someday, data prices will come down to the point where there is no reason for me to keep unlimited data--but that day hasn't yet arrived.

I think many of the people who think that unlimited data doesn't make any sense for anyone assume that everyone could go on a family plan.
 
Not related to the thread but I'm always amazed at the prices of contracts in the US. Or that some pay for caller display etc.

I'm in the UK. I pay £10 ($16) a month for 1000 mins. 5000sms and 1gb data. If I want another gb of data I pay and extra £2.50 ($4) per GB of data.

When I see people paying $100 or $60 for a contract it amazes me.

I usually buy phones outright and get a £10 a month sim only so over the year it costs me £660 so $1072 over the year.
 
I have verizon's share everything 2 year contract (if upgraded phones)
I have 2 data phones and 2 basic phones
I have 2 GB data plan with 1 extra gig on on one iPhone 6 for 2 years and waiting for my 6+ to also get additional 1 gb , total will be 4 GB for 2 years and pay for 2 , I thought about the lease deal but it was just more for me with 4 lines and 2 being basic phones.
 
barkomatic said:
Here I am! :D If you are on a single line that is grandfathered with AT&T's unlimited data then it often makes sense to continue with the traditional 2 year contracts. You don't get a service discount on that plan anyway, so the subsidy is already built in and can't be recovered.

Even if you consider the unlimited plan to actually be a 5GB plan--for me its still considerably cheaper than the other options out there. Someday, data prices will come down to the point where there is no reason for me to keep unlimited data--but that day hasn't yet arrived.

I think many of the people who think that unlimited data doesn't make any sense for anyone assume that everyone could go on a family plan.
Click to expand...
Cricket Wireless
Pro $60 (tax inclusive, $55 with auto-pay discount)
unlimited talk
unlimited text
unlimited data with 10GB 4G LTE speed
AT&T network
 
Nikomanz said:
I'm honestly just curious. I'm an international student here at the U.S. so I have to have an unlocked phone because I move from country to country.

If you have a family plan, or more than one line, a contract is naturally the better choice because of all the money you save. But I don't think it's the same for individual lines.


Here's my argument:

-I bought my iPhone 5c 16gb unlocked 8 months ago with Paypal Credit 6 month no interest financing for $420. I ended up paying it entirely within the first few months and I had a great iPhone unlocked. I even ditched AT&T because they were rude to me and picked up T-Mobile in the same day seamlessly.

- When I really wanted the iPhone 6, I listed my 5c on eBay and it sold immediately for $320.

- I used the $320 and made a downpayment on the iPhone 6 which I paid for using Apple 24 month no interest financing (900 - 320 = 580. 580 / 24 = $24 a month + any service fee) I use T-Mobile which gives me 3Gbs of data for $60 bucks + the 24 payment to Apple it comes out to $84 a month. The same single plan on a contract with a locked phone with At&T comes out to $104 a month! (104 - 84 = 20. 20 x 24 = $480 in savings in two years! And thats having an unlocked phone I can use worldwide.

- Whenever a new phone comes out I'll just wash, rinse and repeat. I basically get very good upgrades at very low payments per month and I end up saving a lot and upgrading at will. Whenever a carrier starts sucking I just switch.


I'm not criticizing anyone's lifestyle or choices. I'm just curious to see if people have reasons to stay in these contracts, with frankly draconian terms, when being contract free (with any carrier, doesn't have to be T-mobile) seems to be have better things going for it. What's your opinion?


Carriers don't tell me what to do, and AT&T or any other network won't screw me over. I laugh whenever a service representative tells me I have to this or that in order to keep their service. I have a phone that works on any worldwide GSM network and everytime a new phone comes out I'm days away from upgrading and even saving money on it.
Click to expand...
if you live in the USA and you're on one of the big 4 carriers...it doesn't really matter if you are on a contract. How many people are going to jump from carrier to carrier if they aren't moving locations or countries?

Several years back I was all about getting the cheapest cell phone bill and tried out multiple MVNO's. I even had transferred my number to google voice and was trying out so many different ways to stay away from the big 4.

In the end, it was such a big hassle and the big 4 are the ones providing the service in the first place. Sure, money wise it was cheaper per month, but it was more of a hassle than anything. With the prepaid stuff...they would call/email/text 2 weeks before payment was due since I wasn't on auto-pay. They would hassle me to no end wanting me to get on auto-pay or just pay for my next months service. That alone was enough for me to switch back to AT&T and get back on a contract.

Also, since I was doing prepaid....I wasn't a higher priority customer as i would be on AT&T as a contract customer. We went to CO one year when we had straight talk.....and a 2 hour part of our drive we had zero service. My mom who was on contract with AT&T had service the entire time.

Sure there are benefits if you are only looking at the monetary value....but to me, you get what you pay for. I'd rather pay a little more and not be hassled to no end. I don't know many people who switch back and forth between carriers...so not really a need to be off contract etc.
 
Its simple, even not taking into account my unlimited plan...I don't plan on changing carriers and switching to a Mobile Share plan would increase my monthly charges by ~$10. Why would I not take a contract phone every other year, even if I planned to sell it in the odd year and pay the difference to upgrade.

The math for Next just never works out for me.
 

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