Chained To Your Phone? It's All Part of Their Plan
Here we go again. Another gimmick that wireless service providers are using to cheat more money out of subscribers. This time, it's the financed device scheme. Unlike other financial-advice articles that state all financing is a bad idea, there's an argument to be made that those who can afford to finance, should. The economics work for those who earn enough credit card perks, cash back, points or miles. This article will explain why financing a mobile device from a wireless carrier is the worse option as opposed to other methods.
First, let's understand why wireless carriers offer financing. Previously, all US wireless subscribers had to commit to a minimum year-long contract with the carrier of choice. Once No Annual Contracts became the new standard, locking customer-owned devices to the service provider's network for up to 2 years became the new "contract". And now that unlocked devices are the new norm, the latest ball-and-chain is financed devices.
Financing a device breaks up the cost for a new mobile device into 36 lower-cost monthly installments, all equaling the full purchase price for the device over 3 years. If a customer cancels their service with the carrier within the three years, the customer would be required to pay the full remaining balance of the device. Either way, making 36 monthly payments or paying the remaining balance in full, the customer gains zero financial benefits. The plan is to essentially lock subscribers into a new "contract" with a device-priced penalty, all while charging a monthly service plan that can change without notice and/or crammed with additional fees and surcharges (see article about illegal cramming) for 36 agonizing months. This can add up to over $3,000 in monthly service charges plus the retail price of a depreciating device. Starting to see the scam?
Options
1. Pay for the device in full
Simply put, this option completely avoids financing all together. The consumer has the freedom to subscribe to any service provider, on any plan, for any monthly service charge, for any duration they want. HERE! Wireless offers brand new devices in the device store for purchase without the need for monthly installment plans.
2. Finance the device directly from the manufacturer
Yes, phone manufacturers sell and finance the exact same device that wireless carriers sell, for the exact same price, for the exact same duration, completely unlocked, and sometimes with added incentives. This option gives the consumer the freedom to take the financed device to any service provider, on any plan, whenever they want, and still pay the monthly installments directly to the manufacturer without the need to repay any remaining balance to the carrier.
3. Purchase a pre-owned or old-stock device
With modern phones making incremental improvements year-over-year, and continued software upgrades and support for older generations, there's never been a better time to purchase a gently pre-owned or refurbished device. After one year of use, a brand new device loses approximately 22-30% of its initial price on the resale market. By the second year after release, a brand new device could depreciate as much as 50% of its initial price when sold as pre-owned. Best of all, with most pre-owned devices, they're usually unlocked and ready to start service on any carrier. HERE! Wireless has gently pre-owned and old-stock devices available in the device store at a fraction of the initial brand-new sticker price.
Don't get scammed into a long-term contract with overpriced monthly service plans. Switch to HERE! Wireless and experience a simpler and safer wireless plan. No contracts, no financing, no fees & surcharges. Get great coverage on the SAFER 5G frequencies at honest prices.
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