Don't go to a carrier just to get phone financing
Ever since traditional two-year phone contracts fell out of vogue, carriers have come up with new and inventive ways of locking you in. One of the best examples of this is a monthly installment payment plan for a new device. It's so simple to walk into a carrier store and walk out with a phone for $0 down, paying that total over the course of the next 12, 18, or 24 months. It just gets baked right into your monthly phone bill — super easy.
But it's also super restrictive, because just like a two-year contract, your phone's cost is once again tied to the carrier. What if you want to take your phone elsewhere? You have to pay it off at the carrier, cancel your service, and move. And if you're financing a $700+ phone (or four), that could be tough — so now you're staying with a carrier you don't want to be with, just because you need longer to pay off the phone.
At the same time, people keep going to their carrier because they often think that's the only way they can get long-term, interest-free financing on what are increasingly expensive phones. But actually, you can get financing with identical terms from all of the major phone companies today, as well as from many retailers that sell phones — even phones that are exclusive to your carrier.
Financing from the phone companies themselves
Phones are expensive, and the top-end models are seemingly increasing in price over time. More and more companies are also offering unlocked models that don't have the option of carrier financing. To help keep the phones accessible, they're offering no-interest financing for these phones.
HTC offers financing with up to a 24-month no-interest term (opens in new tab) for purchases over $599. That means a new HTC U11 at $649 will set you back $28 per month. Pay it off in full on time and you won't pay a penny over that price.
Samsung's financing offers a no-interest term for everything it sells over $250 (opens in new tab), with varying terms based on the amount financed. It typically reserves 24-month financing for $1499+ purchases but also offers it for its top-end phones; that would price out a new $725 Galaxy S8 at $30.21 per month over two years, again with no extra financing charges. The nice thing here is you can buy carrier-branded versions of the Galaxy S8 and S8+ with Samsung's financing, meaning you can get the exact model you want, without having its financing tied to the carrier.
Motorola will let you finance its phones using the third-party service Affirm (opens in new tab), and its terms are very similar to the others. 6-, 12-, or 18-month financing terms are available depending on the purchase price, and there's no interest or additional fees. The financing offers are available through Motorola's website, whether you're buying an unlocked phone or carrier-exclusive model.
Google has 24-month no-interest financing on phone purchases (opens in new tab) from the Google Store. So you can pick up that Google Pixel XL directly from Google for $32.04 per month, rather than going to Verizon just to pay over time. Accessories and less expensive items have 6- and 12-month financing options as well.
OnePlus has one of the weakest financing options, but then again, it also has some of the cheapest top-end phone models. When shopping on the OnePlus store (opens in new tab), all purchases over $99 are able to be financed with PayPal Credit over 6 months (opens in new tab) with no interest if paid in full in that term.
Financing from retailers
If the phone you're looking at doesn't have manufacturer-backed financing, there's a chance you could finance it with similar terms from a third-party retailer instead.
Amazon, where we all buy so many small things, offers convenient financing for larger purchases (opens in new tab), like phones. The financing is no-interest like the others, and the length of financing offered depends on the purchase price. A $149+ phone can be paid off over 6 months, but a $599+ purchase gives you 12 months to pay it off.
Best Buy will let you buy anything in its store with monthly payments if you sign up for its own-branded credit card (opens in new tab). Purchases over $199 can get 6-month no-interest financing, and purchases over $399 get 12-month no-interest financing. This goes for unlocked phones but also carrier-branded phones, which is a great piece of flexibility — just be sure not to confuse it with the carrier-backed financing Best Buy also offers.
Seriously, consider financing outside of the carrier
As you can see, there are several different ways to buy the latest devices on a monthly installment plan while keeping that bill separate from your commitment to the phone carrier itself. It also gives you the ability to shop around and potentially find better deals at the manufacturer or retailer of your choice without giving up monthly financing. While it's a slightly bigger hassle to deal with two bills instead of one, the freedom of having your long-term phone financing separated from the carrier is worth it. Get the phone you want, the way you want.
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Andrew was an Executive Editor, U.S. at Android Central between 2012 and 2020.
maybe you just read the headline and knee jerked a response...
wow . . .
Will they then just load even more bloatware on the phones? I will never use Facebook. I want it gone. But if I jailbreak the phone I can't have Google pay. And the next Android update brings all that bloat back again. AC should do an investigation into how much manufacturers get paid per phone to install bloatware. I'd probably be willing to match that.
What options can Any article give? He can write and article about credit and why it's important not to destroy it or just write one sentence:
"Fix your credit and you will have These Options."
I can tell you how to get the latest phone, if you have no credit.
Buy a Samsung S8/Note 8 or iPhone 7+ (wait til sept for new phone) ( the only two phones on the market that hold Good resale value )
Treat it like gold, and keep it in Mint condition (VERY easy to do). The minute the new version comes out, sell the current phone for 60-70% of what you paid for it and use that money, plus some of your own, and buy the Newest phone, full retail price.
Rinse and repeat until credit IS an option.
Options are a good thing still, right? ...
I would like to point out, that some of those phones will be unlocked. Also, know what features that carrier will allow if you buy an "unsupported" phone.
For instance, the new HTC U11 on AT&T doesn't have HD calling, VVM etc.
Also, if you are on AT&T or Verizon, both allow for a 'voluntary down payment' to help make monthly payments cheaper, and easier to upgrade earlier.
Instead of walking out with $0 and financing all $700 for 24 months, take the option of paying down $250 (and maybe even trade in your old phone) and walk out owing $450 / 24 so the payment is $18 a month instead of $29 a month.
And, you start out being closer to that 75% to upgrade right out of the gate, or closer to the 50% on AT&T next 24 (1 year upgrades)
I was able to buy a phone at a steep discount with a financed rate of $4.99 per month for 24 months. I paid the phone off immediately and saved a lot of money.