It seems like most of the good stuff I write about comes to me in the car. Or the shower. But mostly, the car. I talked about Miranda’s Lambert’s Automatic (and idea I came up with in the car), My KitchenAid Mixer, and How I Feed my Family on $300 per month. All of those idea I came up with in the car. This one, however, is a doozy:
They’re financing cell phones now.
For real. First it was TV financing, then 6 (or 7) year auto loans, and now this. The radio advertisement I heard was for Sprint, but I believe AT&T is doing this now too! Here’s the deets:
The HTC One from Sprint is $0.00 down when you sign a 2 year contract. But, you make 24 payments of $28.34 to pay for your phone, with approved credit. Sounds like a fantastic deal, right? It’s not. Just take a look at the picture below:
Here’s the truth: those 24 payments of $28.34 add up to $680.16 over all 24 months, meaning YOU COULD HAVE BOUGHT THE PHONE OUT OF POCKET! Seriously, the phone’s out of contract price is $679.99. Who even does that! Isn’t that what we try to avoid by signing contracts? To get cheaper phones? To avoid paying full price? Gah!!!!!
Plus, you’re locked into a 2 year contract with this bad boy. With minimum monthly contract of $45 for cell service (one that has data and talking minutes limits), this is really shaping up to be a bad deal. And, in case you’re wondering, if you try to cancel, cancellation fees apply, and the full balance of the phone loan (hahahaha) becomes due.
Oh my God.
What is this world coming to?
Really, whoever thought this one up was a genius. I mean, who hasn’t been at line in the grocery store and seen someone with an iPhone paying for their food with food stamps. Apparently cell phones now rank higher than food, and therefore must be a good candidate for financing, just like cars, television, and surround sound.
But really, why would you even do this? Why, when you can get a brand spankin’ new contract-free Moto G from Republic Wireless for $150 (shipped), and have a plan that’s laughably lower priced with unlimited talk, text, and data Unlimited 3G Plan $25 per month from Republic Wireless when compared with sprint’s $45 Framily plan that has limits on data and the number of talking minutes. Let’s think about this by the numbers: (I’ve left off government taxes and fees because they differ so much by region)
Cost of Phone:
Republic Wireless: $150
Two Year Total Service Cost (Talk, Text and Data):
Republic Wireless: $600.00 Unlimited 3G Plan $25 per month from Republic Wireless
Total Cost: (2 year total)
Republic Wireless: $750.00
Aaaaand the winner is: Republic Wireless! I mean, would you love to save $1,010.18? That’s like a vacation. I could certainly use a vacation – couldn’t you?
Can I make this even better for you? Say you already have Sprint and you’re happy with the coverage you currently have. Want to save $1,010.18 AND keep the same carrier?!?!?!
I thought so :-) Republic Wireless uses a hybrid of Sprint and Verizon’s network (whichever has better coverage where you’re at) when not on wifi, so if you switch, not only will you save more than $1,000, you will get the same, if not better coverage, and you can even keep your number!
You don’t have to switch to Republic Wireless. You don’t even have to break your contract if you like your carrier.
But please, please, please, don’t finance your phone!
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[email protected] says
That’s sad. If you can’t afford to buy a cell phone outright, you cannot afford it. What is this world coming to?
[email protected] says
Agreed! I just don’t get it…
I like the option to get the phone free through contract. I am in Canada so our deals are a bit different, here if you are locked in for 2 years your phone is free. I can’t believe someone would be locked in AND pay for their phone in full!
[email protected] says
Crazy, right? I thought that was the whole point of the contract – they lock you in, but you get your phone for free!
Zee @ Work To Not Work says
Why why why why why?!?!? I don’t really agree with going into debt unless you can deduct it from your taxes. But to adding debt for phones is…. ugh. The thing that’s probably the saddest part about this, is that the people that will do this are the people that are upgrading from their iPhone 4 to the iPhone 5…. They just want a new gadget, it’s probably not that their phone is actually broken.
Petrish @ Debt Free Martini says
Its amazing what we will pay for these smartphones just to feel connected. I can’t….the contracts are ridiculous and at times just a royal pain. Good read.
I can’t understand this. I don’t see the need to still pay for a phone when i really come to you and sign that 2 year just to get my phone for free. What happened to the plan where the only time you have to pay for the phone is if you break the contract? Oh well gone are the good ole day and in comes the new. I must be getting old
Melissa French, The More With Less Mom says
Yowza! I’m not even paying $15 for my little phone. Thanks for sharing. Hello from Flaunt it Friday!
Mum of One says
They just make it so easy for people to get themselves in debt! Useful post. Thanks so much for linking to the Monday #pinitparty. Have pinned :)
Tammy @ creativekkids says
I really enjoyed reading this one too. I don’t have a cell phone as I’m home most of the time and we have a home phone with Magic Jack. My husband has to have one with work, so we bought a Google Nexxus 5 outright and we go with Ting. Most of the time we turn his 4G off as he uses wireless, so it is usuallly $25 (including taxes.) If we use a lot of 3G/4G, it goes up to $35, but I liked that plan as we can add more phones for $6 each. Most other monthly phone plans made you get separate plans. Thanks for linking up to the Bloggers Brags Pinterest Party. I have pinned it to the Bloggers Brags Pinterest Board.
Nice! I have heard about Ting, but I hadn’t really done any research on it. I was under the impression that it wasn’t as good of a deal as Republic Wireless, but It sounds like a really good deal!
Are these legit companies? Can someone provide more info please? Love this post! :)