So if I'm right, you should NEVER buy a phone under a two year contract

[ButterflyBlood]

I just did some math per my carrier and found out a two-year contract is the biggest ripoff ever. It's effectively a large interest loan with a huge downpayment.

I wanted to get a Samsung Galaxy Note 5, of which the contract price under my carrier is $299 plus the upgrade fee of $40. And then it's $40/month for the next two years for the line. The out of contract per month price? $15. And the full cost of the phone? $696.

So you're basically paying $25/month for the phone for the next two years. Over 24 months, that's $600.

$600 + $299 + $40 = $939

That's basically $243 in interest on a $357 loan! A 34% annual interest rate! Why on Earth would anyone ever do this?

And the best part is, my carrier even offers an actual loan with no down payment or interest too as I understand they all do now. Hell I could make a down payment of $339 and then just pay $14.87/month on top of the $15 line access fee, and thus pay less than $30 instead of $40 as I would under contract. Which also offers no early buyout aside from cancellation which incurs a huge ETF which means you pay even more overall.

I understand all carriers are pretty similar on this, but am I wrong anywhere? It seems that signing a two year contract today is absolutely pointless and basically a way for cell carriers to scrape money off people who are bad at math.

[NJCher]

1. first of all

dump the phone. Just dump it entirely. You will not only have more quiet and peace of mind, you will have extra $$ in your pocket.

Get rid of the idea that anyone has anything worthwhile to say to you. They don't. Anybody that has anything worth saying has it written down in a book. You can get the book for free in the library.

Third, Samsung is the worst company ever, besides Comcast and Verizon. You are dealing with the cesspool of companies. Your rip-off deal is completely in character.

Someone tried to give me a brand new touch screen notebook computer the other day. Yes, brand new. And since it was a Samsung, I argued with them. I eventually accepted it, but only because it was a condition of my job.

In the end, the phone is a convenience for other people. So why should you pay for their convenience? If they want to reach you, they should pay.


Cher

[WinkyDink]

7. Bwah! I don't know if you're being sarcastic, but I agree with you!

[NJCher]

11. Not sarcastic :)

This is the way I conduct my affairs.



Cher

[Boxerfan]

2. The warranties are almost always useless & a sales gimic.

And in previous life-I was a insurance claims adjustor for mechanical breakdown warranties. I also drank booze back then. Almost 20 years will be come December.

Point is it is a scam. Buy from a mfr with a good reputation & a warranty. My observation if it is going to break I would expect it early thereby being a warranty issue.

And the warranty they sell on Amazoniana?-It is the same company that advertises on Rush Limpballs-scam clientele of mass marketers dreams.

[TexasBushwhacker]

3. Contracts are for suckers that have to have

the latest toys. I quit doing contracts 2 years ago and I'm never going back. I bought an android phone from Boost Mobile for $100. I pay $30 a month for unlimited talk, text and data (2 GB high speed data). I even went through MrRebates.com and got a $30 rebate.

[Gidney N Cloyd]

9. I got basically the same kind of deal from Virgin Mobile.

And I couldn't be happier with my LG droid and my Virgin service (which uses the Sprint network).
I like toys, too, but I've been wrong too many times to have much interest anymore in always being bleeding edge.

[Recursion]

14. Boost is the only company that markets to poor people and actually offers a good deal

I've always liked them; even when I got back on the financial grid I stuck with Boost because it was a good deal.

[Recursion]

15. I develop Android apps so I have a lot of handsets

I've learned to buy the display models (you just have to be flexible and keep checking different stores). I even managed to get a Samsung Galaxy S6 Edge for $300 that way.

[GermanDem]

4. T-Mobile

basically now offers zero interest on their phones if you have good credit.

[Xithras]

5. Yep. All TMo EIP's since 2013 have been 0% interest.

While I have issues with their service area, TMo has the best plans and lowest costs of any of the major carriers right now. The 0% EIP is a big part of that.

[irisblue]

6. EIP? thx

[Xithras]

8. "Equipment Installment Plan"

Basically, their term for making monthly payments on the hardware instead of paying for it all at once.

[LWolf]

10. I bought my phone upfront.

$150, although I could have gotten one for less. They range from a free sim card to use with a phone you already have, from $35 - $150.

$20 for 750 minutes talk time, $20 for unlimited text and 1.5 gigs of data, $40 a month.

[laundry_queen]

12. I did the math as well

And I'll stick with my iphone 4 for now. I got it for free on a 3 year contract 3.5 years or so ago. For an iphone 5 or 6 here in Canada now they want my data charges to go up $30/month (I already pay $50) so that I can then pay $350 for the phone (slightly less for the iphone 5 but not by much). Hell no.

I calculated it would be cheaper to buy the iphone 6 outright and find a cheap carrier around here you can get one for $35/month that has mostly everything i use right now.

I can't really afford that option either right now anyway. But my iphone 4 cannot upgrade anymore and won't let me sign into itunes until I do. I would go to another phone, but I love my apps I have tons. Stupid apple and their gimmicks.

[Recursion]

13. The entire rest of the world buys their phone up-front and pays by the month for service

It's a much better way. And, yeah, the contracts + subsidized phones are a complete rip-off.