Verizon: buy a phone now or installment for 36 months

In a nutshell: Verizon is simplifying the smartphone buying process by removing plan options that some shoppers are sure to take advantage of. Until recently, Verizon smartphone buyers had the option to purchase the phone all at once and pay the full amount up front or spread the cost of the device into monthly installments over 12, 24 or 30 months. Now the only option is to either pay for the device in full or spread the payments over 36 months.

A quick check of Verizon’s website reveals a new option. applies to all devicesregardless of the original cost.

The concept isn’t entirely new, as the auto finance industry has been extending loan terms for years to “counter” the rising cost of new cars. It is not uncommon to see loans for 84 months, and for some special vehicles, companies now offer loans for 120 months.

While you are technically paying less per month on a longer-term, zero-interest loan, there are risks.

First, it keeps you in debt longer on an asset that is depreciating. It can also make it difficult to switch carriers or buy another phone in the future with an anchor attached to your ankle, especially if your new carrier doesn’t offer any promotions at the time.

What’s more, payment plans are often used to hide the fact that you’re paying more for a phone now than you did just a couple of years ago. Many people don’t even look at the actual price of what they are buying, but rather how much it will cost them per month and whether they can afford the purchase, which is a dangerous way to manage their finances.

Image credit: Zana Lateef, Taufik Barbhuya

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