There are multiple ways that you a purchase a new phone when you feel that it’s time to replace your current device. The most common options are to pay for the new phone using cash, every month or over some time. The third option available to you is the finance option, this is when you opt to purchase the phone on credit. Lets see Is Financing A Phone Worth?
When it comes to buying a new cellphone, the funds you have on hand may not be sufficient to buy the phone that you would like. This is where financing options come into play. Using options that allow you to finance your purchase of a phone can have some advantages. The first of which is that it gives you time to pay off the phone. Another benefit is that you can earn rewards on your credit card, alternatively, financing can be used to improve your credit.
The advantages of financing change depending on the type of financing option that you choose, or qualify for. When you consider financing and whether or not it is worth it, take the following into account. You get the phone now, and though you don’t have the cash for it, you qualify for some benefits on your finance option and build your credit. To answer the question, yes, financing a phone is worth it because of the benefits and the different financial options available.
Different financing options
Apple Card- If you’re one of the people who only use apple specific products then yyou’re goingto the financial option may be the Apple card. An Apple card lets you buy products that are manufactured by Apple and pay for them over several months in fixed installments that are free of interest. In addition, you will also receive cash back rewards of 3% of your purchase. The cashback will be deposited directly to your Apple card through the wallet application.
To apply for the Apple card, you need to have an iPhone that is compatible with the wallet application and need to have the application installed.
Samsung credit- If your preference is Samsung instead of apple then you can use the credit facility that Samsung offers. This is most commonly referred to as the Samsung line of credit. With the Samsung credit finance option, for 24 months you will receive a 0% APR.
In addition to that, after 12 months, you are eligible to upgrade to a more recent Samsung galaxy device with 50% credit of the price of the new device. That only applies when the phone that you’re trading in is in good working condition. If you fail to pay off the purchase of your phone within a 6-24 period you risk being charged interest.
Service provider finance- in addition to the financing options that are provided by cellphone manufacturers there is another financing option that you can consider. This option is the service provider finance option. To make full use of this financing option you bill the purchase of your new phone to the service provider that you already have an account. An example of such a service provider is Verizon.
Verizon is one example of a service provider that customers who are eligible to bill anything from cellphone and cellphone accessories purchases directly to their Verizon account. This allows you to pay the amount that is outstanding monthly when you’re next bill from the service provider arrives. There is no extended time to pay, however, the payments are free of interest.
Credit card- Financing your phone through your credit card allows you to earn a couple of rewards. These can be either cash back or some form of points.
Benefits of financing a phone
- One of the biggest benefits of financing a phone is that you don’t need to separate a large sum of money to get the phone that you want.
- When financing a cellphone purchase, you put yourself in a position to build your credit, provided that you make your payments on time; which is also in itself a good thing.
- It is a form of saving money if you are lucky enough to qualify for 0% financing, which is a type of financing where you pay 0 interest.
Cons of Financing a cellphone
- Financing may hurt your credit score should you fall behind on making the monthly payments.
- There is something known as deferred interest which is one of the things that makes financing a cellphone expensive.
- New contractual obligations, when applying for cellphone financing, you may be required to enter into a new contract depending on the type of financing you choose.
Conclusion
Depending on how urgently you need the new phone, and your financial situation at the time financing can be a very worthwhile option. This is because it gives you the phone when you need it while also giving you time to pay it off. It also has several credit benefits that come with it, in the end, the choice is yours.
Frequently asked questions:
- Is financing good for my credit?
Yes, financing a cellphone can help you build your credit.
- Are the multiple financing options available to me?
Simply put yes, there is a selection of financing options out there for you to choose from.
