Is it true most Americans buy phones on carrier installment plans?

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SeparateFly2361@reddit

I know I’m too lazy to switch carriers, and getting the phone from the carrier is like buying it on a 0% interest loan

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neutronstar_kilonova@reddit

% interest loan

The cost is baked into the phone plan, of course. You think the carriers are doing charity and losing profit margins to keep people in their plan?

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Far_Kangaroo2550@reddit

Yea but if you dont finance a phone, you dont get a discount. Ao to the end consumer it is the same.

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t-poke@reddit

If you’re not financing a phone, you could switch to something like Mint or Visible and pay far less for the same service.

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So the experience in Georgia, is how it is everywhere? You know there are areas of the US that versions coverage is “trash” too? With your logic that would make it trash for everyone

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neutronstar_kilonova@reddit

That doesn’t mean anything.

If you don't finance you buy a phone actually within your means. You don't buy a $1000 or a 1500 phone. You instead buy a <500 phone and be satisfied.

If carriers are offering those deals, they know the phone really isn’t worth the full price and you will get it for a discount 1-2 months down the line all across the board. It really is simple. You’re being tricked into either paying more OR buying a more expensive phone than you need.

“Buy now, pay later” is a well known wealth draining trick.

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BJNats@reddit

That isn’t true. I was literally buying a phone less than a month ago. Paying cash up front for a previous generation phone would be more total than paying over 2 years for a current generation phone (on one major carrier, not mine unfortunately).

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46692@reddit

“Just drop $1k guys it’s simple!!!”

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All_FIREdUp@reddit

If you want a $1K phone, you should be able to afford a $1K phone. It is actually simple.

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46692@reddit

Ok Dave Ramsay. There’s nothing wrong with manageable debt.

For a phone maybe is not necessary. But there is no downside to financing through my carrier. If I stopped my service with them I’d have to pay the remaining value of the phone up right away, but I’d have to do that anyway if I bought it.

I’m sure you will finance your car or house or something, why not a phone. If you avoid all debt you’re going to expose yourself to unnecessary risk.

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VerifiedMother@reddit

But there is no downside to financing through my carrier

Because you end up paying way more for the phone service than if you were on an MVNO phone plan for the exact same service.

Visible offers the same service as Verizon for 1/3 the price

It’s not just unpopular, it’s wrong. You’re mixing up opinions.

Yes, you should be able to afford your phone. Buying a phone when you cannot afford it is bad. Paying for it in a lump sum when there is a 0% interest alternative is bad.

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All_FIREdUp@reddit

There is no situation that going into phone debt is good. Even at 0%. Life is unpredictable, markets change, jobs get cut, other emergencies occur.

I don’t know where this “consumer debt is good if it’s cheap debt” movement is coming from, but it’s risky and stupid thinking.

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Rdtackle82@reddit

It’s not cheap, it’s free. It makes phones initially affordable for people who could not otherwise afford them, yes. But if you do have the means, you are being gifted the productivity of the remaining balance of that loan for the duration, and it would be imprudent not to take advantage.

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Duck_Diddler@reddit

A lot of Americans cannot afford a $700-$1400 phone up front

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mooshinformation@reddit

If someone can't afford it, why TF would they get a $700-$1400 phone? Last one I got was a motorola under $200 and it works perfectly fine. Sure, I wish the camera was a little better, but it's fine and I don't have $1,000 to drop

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Duck_Diddler@reddit

People pay for the brand and are also addicted to their phones.

A lot of people literally live on them. It’s a sad reality

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I tried Ting once. It just wasn’t that great. It would be slow or unusable in places where my wife’s phone, on AT&T was fine. Just not going to use one of those services again.

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spintool1995@reddit

I'm on AT&T and pay just over $200 for 5 phones. If I subtract out the monthly phone payments for the 5 phones we got for "free", that's less than $20 per line per month for the service, including tax.

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Saltpork545@reddit

You spend 200 a month on 5 phones. That's 40 a month.

I spent 25 a month for service on a phone I paid 400 for in 2019. Let's exclude 2026 entirely. 2019-2025 is 72 months. 400/72 is 5.56 a month. So my phone cost in total is 30.56 a month. Yours is 40. I'm paying less than you across the board.

The difference is I don't need 5 phone lines, I need to worry about a single phone which I can install custom OS on, replace battery, and so on, and I can switch to whatever carrier I like when I like for a cheaper rate.

We have different needs, but I'm still spending less than you. Objectively.

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spintool1995@reddit

I got 5 $1000+ phones. That's $27 per month over 5 years. $40-27=$13 for the service.

It's fine you chose to buy a low end $400 phone, that's not what I did. The fact remains, you're paying much more for the actual phone service.

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Saltpork545@reddit

And that's where your ego gets involved.

I got a OnePlus 7t outright for 400 due to a great sale in 2019, which is the year it premiered and it was also OnePlus' flagship killer that year aka it was on par with the phones from Apple or Samsung for hardware or better.

I also have LineageOS installed on it, so my phone is faster, unlocked, cheaper, more secure, and I can go find the cheapest reliable MVNO to make my bill smaller.

I've replaced the battery once and my phone still works just fine, so you're paying for overpriced phones, are paying more than I am, and bragging about getting the better deal despite being shown this.

I'm not paying more. Objectively and never have. I'm sorry you can't understand this but I laid it out very clearly and quite easily and until you can do the same without saying 'but my phones cost more!' you've lost this argument dude. Sorry you can't come to terms with that.

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Chimpbot@reddit

You're also letting a bit of ego get in the way, to be fair.

OnePlus' current offerings aren't much cheaper; their latest "flagship" phone is still $900. They're also shutting down the global operations this month, reshifting their focus back to China.

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Saltpork545@reddit

https://www.gsmarena.com/the_gsma_has_awarded_the_oneplus_7t_pro_as_the_best_smartphone_of_2019-news-41720.php

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cheradenine66@reddit

https://prepaid.t-mobile.com/connect

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condoulo@reddit

$15/mo for 5GB of data? I'd blow through that in less than a week. And carriers, including T-Mobile, often deprioritize their prepaid plans in favor of reserving bandwidth for their post-paid customers.

Your comment of saying anyone paying more than $25/mo is getting ripped off reeks of a one size fits all mentality and completely disregards other peoples needs and use cases. "My way that fits my use case is right and everyone else is wrong."

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CitronTraining2114@reddit

They're making bank on your undeserved loyalty.

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pinniped90@reddit

Well, if you already had the phone wouldn't you just go with an MVNO on the same network?

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southbaysoftgoods@reddit

HellsTubularBells@reddit

You're locking yourself into a way more expensive plan when prepaid options, even from the major carriers, are far cheaper.

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southbaysoftgoods@reddit

Yeah I see that now. Gonna look into this.

I used to have pay-as-you-go but switched to the expensive plan when I moved to LA because my phone data was basically unusable.

But I am learning about the qci scale and will probs switch to a cheaper plan. I have a physical sim so not sure if this phone works on any carrier.

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Candid-Equivalent-82@reddit

I've had the same carrier since I bought my cell phone in 2000. It seems like a lot of work to switch lol!

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VerifiedMother@reddit

I could switch my phone plan in about 20 minutes laying on my bed, especially with esim, it's not that complicated

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IamBananaRod@reddit

it's not like I'm going to jump carriers every 6 months, I've been with the current one for 16 years and is just now when I'm considering moving to a new one

No I'm not, you're just making shit up.

My phone plan is the same cost whether I'm actively financing a phone or not.

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El_Polio_Loco@reddit

Yeah, but a Verizon plan costs significantly more than a cheaper alternative.

How do you people not get this?

The extra cost is what you pay to stay with ATT/Verizon/Tmobile instead of lower cost suppliers.

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Brandoskey@reddit

I don't have a plan with any of those carriers, my carrier is an MVNO, Google Fi.

You're wrong man, just get over it

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El_Polio_Loco@reddit

Google and Apple are a little different, since they make the money on the actual sale of units.

That's why Apple is able to offer 0% on their card for financing. Not the same as having it paid by the carrier, get over it.

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Brandoskey@reddit

It's as expensive as you want it to be. We get it, you want people to buy old low tier phones and use the cheapest MVNO possible, service quality be damned. Just say that, stop making shit up

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FreedomBread@reddit

They loan you the money for free. It is free. There is no interest.

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El_Polio_Loco@reddit

They are charging you more than you would be paying in interest by the increased cost of your service.

You get that right?

These companies aren’t in the business of losing money. They’re taking a loss on phone loans (though probably not even that as they’re likely getting a discount on the unit), so that they can lock you in on a more profitable plan.

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scarlettohara1936@reddit

This isn't true. Or at least it's not true for me. I've been with Verizon since before they rebranded to Verizon. Like before 9/11. I'm on a very old plan. One that was created to entice people to switch to a smartphone. Unlimited data and calling. My pricing hasn't changed in 10 years at least.

I get a new phone every 3-5 years and I use thier money to do it.

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El_Polio_Loco@reddit

Right now an unlimited Verizon plan is $55/month plus the cost of the phone, that doesn’t even include the highest connection speeds.

An equivalent plan from Mint or another group is $40/month.

The prices just don’t compare, but that phone makes it easy.

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scarlettohara1936@reddit

There is no way I would move to a smaller provider. The hassle isn't worth the $15 a month for me. I've never lost service with Verizon. Not even when people around me don't have service.

Plus, if the customer drops or loses that phone, they're out of luck.

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billymondy5806@reddit

Yeah, but if you know, you’re gonna keep it anyway….. I’ve been with them for 10 years now it’s not like I’m going anywhere.

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xxrainmanx@reddit

I'm on a no-contract plan. If I swap phone companies the new company pays my phone off and I'm good.

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El_Polio_Loco@reddit

The value of the no-contract plan must, inherently, be enough to the company to potentially take a loss on your phone loan.

When accounting for the broad risk of you moving or paying off and moving elsewhere.

RollinThundaga@reddit

Seems like a scam to me

Only if you don't understand how infrastructure works. It might be different in other countries, but in the US, the flagship networks own their own cell towers, fiber lines, and datacenters.

SHDrivesOnTrack@reddit

I’m always surprised that people don’t know about Apple’s credit card offer. They will let you buy an iPhone interest free for 2yrs as long as you make the incremental payments to the credit card.

Very handy if you want an unlocked iPhone to use travel eSIM but don’t want to pay for a $1k phone all at once.

I think Google and Samsung have similar offers for their android phones.

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kurai-tsuki@reddit

As someone learning about it for the first time, why would anyone think of Apple for a credit card?

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DankBlunderwood@reddit

The monthly service costs a lot less if you have your own phone than if you buy their phone because the cost of the phone is wrapped into the plan and yes they overcharge for it. If you can remotely take the hit, it's cheaper to buy an unlocked phone up front. But the providers know most people can't so it's priced in such a way as to entice them to buy the overpriced phone over time. Classic banality of evil.

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The_Law_of_Pizza@reddit

Phones are $500-1000 usually, and most Americans don't have that much in savings

FYI, those headlines are deliberately phrased as clickbait.

The studies involved were about literal savings accounts - the kind that aren't common anymore because they're sort of useless in an era of digital checking and zero interest.

You can easily see that the statistic is bunk by taking a drive through the upper half suburbs of whatever city you're in.

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kurai-tsuki@reddit

The study I was referencing was about the ability to cover an unexpected expense, like a car repair. Even with digital checking, you might not have the cash on hand.

That seemed comparable to the cost of a phone: something you don't need to buy all that often and would have to save up for in advance OR one you'd find yourself facing in an emergency, like dropping your old one in a river or something.

And you'd be surprised how many people go into crazy debt just to "keep up with the Joneses", even in those nice suburbs.

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The_Law_of_Pizza@reddit

The study I was referencing was about the ability to cover an unexpected expense, like a car repair. Even with digital checking, you might not have the cash on hand.

I'm familiar with that study, too. In that one, they asked how people would pay for such an expense, and used all of the "credit card" answers as an assumption that the respondent didn't have the money to pay cash.

But that's not true in 2026, when people frequently use credit for the cash back benefits and added security.

Or you might be talking about the one where it asked if people felt comfortable that they could withdraw a certain amount of cash on 24 hours notice - which again, just doesn't match with modern money management. Tons of people have their savings in things like money market accounts that are liquid but might take several days to process.

The bottom line is that they always have to manipulate the phrasing and data to come up with these ridiculous statistics about how everybody has ten cents to their name.

Top comment for me. I guess Reddit learns and puts popular comments higher as the time goes on.

Regular Visible. Visible Plus didn't make a noticeable difference at my workplace (out in the middle of nowhere with 1,000 people in the building all breaking at the same time) so I downgraded to the regular after trying it for a few months.

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VerifiedMother@reddit

You are deprioritized and the service is demonstrably worse, but it's still worth it.

Real cost will be less than what they charge.

They aren't "literally all the same" - innovations have stagnated and their designs are all very derivative, yes.

There are still improvements with CPU/GPU performance and efficiency, much of which probably doesn't matter to an average user. Smartphones are so incredibly fast these days, it's kinda ridiculous when you think about how much compute is sitting there under utilized.

I think it's more accurate to say you don't care about about having the latest nor do you have a use for it, so to you it's a waste of money if you're being objective. And I'd argue that applies to 99% of people, and those that do care about having the latest [insert phone brand] are really just doing it as a status symbol or just because they like having nice things. Which is actually okay, it's not your money and not every purchase needs to be entirely objective.

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TheMuffler42069@reddit

Functionally a phone from two generations ago is no different, yes. I believe we are saying the same thing. The innovations are real but for my needs they don’t justify the cost and yes I believe this to be true for 99% of people. So ya, I could be using the original iPhone right now and for my purposes it would work just fine.

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bearsnchairs@reddit

Not really true. I have an MVNO and got our last phones on a 0 interest installment plan at retail price.

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nkempt@reddit

My MVNO has 0% phone payments too, they just have Affirm handle it. Never thought I’d use a BNPL service in my life but here we are with a current-gen phone on a good carrier.

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Reference_Freak@reddit

As an American, this is what I do.

Payment and lease plans cost more money in the end but the money not spent up front is not significant enough to make worthwhile interest on in any account I can afford. This just adds an unnecessary financial tether locking me to another company.

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Hylian_ina_halfshell@reddit

Because i like having an unlocked device

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greyHumanoidRobot@reddit

"No interest" is the naive concept. Money is fungible. What you should care about is "no cost" or "less cost". Any financed product is at a higher cost but you have to find it if it is buried in a bundle and people just don't want to think about that.

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dumptruckulent@reddit

Not really true. I can go to an Apple Store, Best Buy, or look online and see exactly how much the exact same product costs with cash.

Also, every financing offer I’ve ever seen breaks down exactly what how much you pay each month, how much you pay in total, and how that money is split between principal, interest, and any fees.

I’ve never financed through a carrier. I have the Apple Card so I can finance any Apple product for a year for free (and know it’s free financing because I know the cash price and I can do basic arithmetic). My original comment was just to explain why people might finance with a carrier.

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greyHumanoidRobot@reddit

If you're looking at the latest model, the supplier can limit the channels to an oligopoly, so you're still paying interest but you don't think you are and that's the premium you have to pay to an oligopoly.

When there is more competition (like for older models) or a lot of vendors (or even Ebay, Amazon, local exchanges) then you'll pay more for financing.

You haven't internalized that money is fungible so you believe the break down.

Lastly, one thing that is almost impossible to get people to understand is No such thing as a free lunch - Wikipedia and that is why "free" is the most uttered word in advertising and always will be. And I'm not going to change that when you read my comment. It's up to you to figure it out.

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rojoshow13@reddit

I had the opposite thought process. Why not pay more up front and not be locked into a contract with limited minutes and data, and by the end of the 2 years I've paid as much or more.

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king_m1k3@reddit

The days of “contracts” are long gone. You’re only “locked in” in the sense that if you cancel your service, your full balance immediately becomes due, which would be the exact same as buying it outright.

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rojoshow13@reddit

Yeah, that's locked in. I can't switch to another provider or I'll be paying double.

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WonderButtBrace9000@reddit

But it’s not double.

It’s either pay $1000 upfront or pay ~$42 per month and then if you want out after a year you pay the roughly $500 left.

If you can get a 0% interest deal then it’s a no brainer. If you get charged interest, then it’s another story and you’d need to do some calculations to which is better for you personally.

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rojoshow13@reddit

I pay $45 a month. Over 2 years that's over $1,000. If I cancel after a year and pay the remaining $500...then go with another provider I'm going to pay the new provider. So it's not quite double, but I'm paying $1500 instead of $1000. Or I can just prepay Straight Talk and switch next month for nothing. Never any extra fees for sending too many texts, or talking while roaming...is that still a thing? I also get the phone I want. I stopped in the Verizon store last year to see if they had S25 Ultras for sale and they said yes, but only for people who sign up with them, AND I wouldn't even be eligible to buy the S25 until after I had been with them for X amount of time. I laughed and walked out.

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In the UK it's like a one step process and you get much better deals and pay far less swapping every year.

It's cheaper to buy your phone outright and shop for a new mobile contract each year than to buy the phone+ expensive contract from somewhere.

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Maleficent-Hawk-318@reddit

That just sounds like an annoying hassle to me, tbh.

Personally, I like having a financed phone, even though I don't need one. I get a significant discount on phone plans through a major carrier through my employer, and my plan also offers discounts on some things I'd have anyway, so I wind up paying about the same as a budget carrier anyway.

And as far as the phone itself, it's probably just bad luck, but I always seem to get lemons when I try to go the cheaper refurbished route, lol. And if I'm buying new, my phone carrier is actually on the low end cost-wise, and does have older models available if I don't want to shell out for the newest one, so I'm not really saving any money on the total cost of the phone. No interest, no fees, and no hassle makes it all pretty appealing to me.

Obviously not every American is in this exact situation, and I did shop around more when I was making less money and also didn't have the discount I get through my employer, but nowadays I don't really care if I pay a little extra for the convenience of it all.

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benck202@reddit

Not often, but the phone financing schemes keep you locked into the big 3, when otherwise you can an MVNO plan to be on the same network for a tiny fraction of the price.

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Sirhc978@reddit

I've switched carriers once in the last 20 years.

Even still, once you pay off the phone (typically a year or two) you can unlock the phone if you really want to switch carriers.

Because it locks you in to a higher cost phone/data plan.

You’re talking about the old style where if I buy X plan then I get Y phone for 200 dollars.

I’ve never bought a phone via installments with the carrier.

I just pay cash upfront. And I keep my phones for years. Last phone I had for six years.

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DanDanDan0123@reddit

I have done installments in the past, but it stresses me out! Since I keep a phone for about 4 years it easy to put a little money away each month to be able to purchase outright. It would be $21 a month for 4 years to buy a $1000 phone.

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MesopotamiaSong@reddit

my current phone was free with trade in. I just pay the tax and trade in fee in my monthly installment

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Top-Nature5873@reddit

Most do, yes. I do not. I have straight talk, which is a prepaid phone. Every 3 or 4 years, I go to Walmart and buy a $60 android straight talk phone and put my sim card in it to keep my number. The plan is $36 a month. I get the lowest-priced one. It's just 10gb a month of data. But I have wifi at home and at work. That's pretty much the only two places I go.

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buta-backpacks@reddit

I buy unlocked phones full at full price directly as you do.

It's common because paying for anything by installments is common in the US. Why is your way better?

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TheJokersChild@reddit

Your question automatically implies that you think your way is better. Why?

SIM only used to be about 30% of the contract

It's now over 40%, but obviously that means people still mainly buy their phones via their monthly contract

Phone carriers in the UK no longer seem to subsidise the handset cost - so I assume SIM only is going to be the majority within a few years

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ZaharaWiggum@reddit

I do this because I replace it every 3 years and cascade the old phone to the kids.

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Beneficial-Pitch-430@reddit

I advised all my family and friends that use iPhones to either buy directly from Apple with their 1 year interest free payment plan and then get a sim only plan for £10 a month.

I don’t know about ‘most’. I have bought 3 android devices unlocked and one iPhone from a carrier. Problem I had with my unlocked global device was that it did not have many of the frequencies common in the US, so I encountered some limitations. I have an excellent Xiaomi Poco F3 that is now a WiFi device only because so many carriers don’t match the signal. It dropped calls often when it had to change towers.

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JasminJaded@reddit

It’s so common because the carriers have more control than consumers do. They want us to buy a “cheaper” locked phone from them and get a “cheaper” service plan.

I’m not paying full price today when I can spread it out over time with 0% interest. Time value of money.

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Rumpelteazer45@reddit

I paid for mine outright.

But my financial standing is better than the average American. My husband and I are DINKs with a HHI of 400k+ annually (income is very close to being even). He drives a beat up picked up truck with 250k+ miles and I drive a civic. We don’t have consumer debt or student loans. We are not the normal household and I know that.

MakeStupidHurtAgain@reddit

You’re reading more into their comment than they said. They just said it’s easier to pay off the phones they want over time than to shell out all the money in one go up front. Which is true.

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Tacokolache@reddit

You could also get a couple of empty cans with a string attaching them

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No-Lunch4249@reddit

I'm just saying, people act like they have no option but to pay thousands of dollars for a phone when actually they absolutely do have choices.

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Khpatton@reddit

Yeah, I always find “move to [shithole]” comments so funny, because there’s a reason it’s so cheap. Quality of life is low, jobs are fewer, you make less, the schools are worse, and the list goes on. Obviously rent is going to be cheaper somewhere no one wants to live.

I’m saying this as someone from the Deep South, for what it’s worth. There are things I love about the South, but pretending the cost of living isn’t lower here for a reason is disingenuous.

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Eubank31@reddit

Budget phones (sub $500) are much more common outside the US where most people buy their phones outright

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I like getting the latest and greatest and then using it for 6+ years. Still rocking my iPhone 12 but your way seems much more cost effective and I might have to look at that going forward. AT&T has gone downhill and their prices have only gone up.

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HailMadScience@reddit

Really? My AT&T bill hasn't changed in a decade, except for installment payments when I finally had to retire my first phone.

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Forsaken_Election708@reddit

I’d rather keep the $1,200 in my account and automatically pay an interest free loan than fork over the cash and rebuild my savings. There’s zero negatives for me and many others doing this. Most people don’t jump between carriers and keep their phones for at least 2 years (typical span for payments). It’s not necessarily the right move for everyone, but it is for most people. Even with cheaper phones.

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UnseenTardigrade@reddit

It's like you didn't even read my comment.

I AM NOT SAYING YOU SHOULD ONLY PAY FOR A PHONE UPFRONT. I straight up said you should use carrier financing if it saves you money or lets you delay the cost.

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CatoTheElder2024@reddit

If AT&T is willing to give me 1000 credit for a screen cracked iPhone 13pro for an iPhone 16, then I’m doing it. Bc that’s exactly why I have an iPhone 16 atm.

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MakeStupidHurtAgain@reddit

Many of the carriers run specials from time to time where they credit you part of your service fee to offset the expensive purchase. It’s basically the old contract model from 15-20 years ago, except now your device is the “collateral” and you can’t switch carriers until it’s paid off.

rolyoh@reddit

Because a vast number of Americans have been trained by advertising executives, and do not think to question whether something is truly a good value.

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MassConsumer1984@reddit

Bought mine full price up front.

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suboptimus_maximus@reddit

Americans are buying pretty much everything on installment plans these days.

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NYOB4321@reddit

My mobile service monthly unlimited plan payment ($30) is the same regardless of having a deal on a phone. That is the price of the service alone. It doesn't matter if I buy a phone through them.

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ac7ss@reddit

Most Americans do. It's a way to lock you into one carrier.

No_Mony_1185@reddit

I always buy unlocked phones. They're always screwing.you with the contracts when you buy them from the carrier

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DejaBlonde@reddit

Most of us don't have a spare grand on hand, so yeah.

Personally I tend to use trade-in rebate plus specific discounts. This time around I got a Pixel 9 right after the release of the 10, and because I'm with Google Fi, I could take advantage of their deal, costing me about $400, and getting $100-ish back.

Of course I still had to use a pay-in-4 because my pay is shit, but that's another story.

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gruffbear@reddit

I buy direct from Samsung. Their trade-ins when a new phone comes out are insane. I bought an S26 Ultra and traded in my S24 Ultra. I got $800 off and a free Samsung case. The phone is unlocked and doesn't have any carrier apps installed. I transferred my eSIM to the new phone during the initial setup with no issues.

They have some interest-free financing available through Affirm if you don't want to pay up front.

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kyliztu@reddit

AT&T my phone provider outright told me I could not pay for my phone up front and had to finance in installments along my cell service payments. It seems like the system is just set up this way. Cell carriers do not want you to pay for your phone fully upfront.

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Benchod12077@reddit

Why pay all that money out of pocket when I can pay over time with no interest and most of the time carriers will offer trade in deals and you can get a 1000k iPhone for like $300

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antemeridiem913@reddit

Because most people can’t actually afford phones unless it’s in an installment plan and a lot of American want to upgrade their phones every year

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509RhymeAnimal@reddit

I think it's common because people feel like they have to have the latest and greatest. There are still tons of us that really don't care what version of iPhone or Samsung we have and have figured out unlocked phones bought outright have a lower cost of ownership.

People make the argument that they can spread the cost of the phone over a 3 year contract, it's convenience because they gotta have the lastest and they aren't mathing out how much they save if they stopped caring about name brands and newness.

I bought an unlocked $300 smartphone 5 years ago and it's still going strong. Amortized $300 over the length of time I've had the phone plus the couple/few more years of life it has left along with the freedom to switch providers if I want better service/price and I'm way ahead cost wise. But again, I do not care about phones. I just want one that works and isn't stupid expensive. Fastest way to bore me is to tell me about your super cool iPhone version 100 and all its features.

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Saucynachos@reddit

Extra sales, 3 year payment plan with 0% interest, and there's an almost 0% chance I'm changing carriers within those 3 years. So instead of shelling out $1100 or whatever now, I pay $22ish/month with zero interest totaling $800.

I get it cheaper overall and I have that money now which could go towards investments. Or more realistically for me, snacks. Either way, it's the better financial decision.

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Xistential0ne@reddit

How much is monthly service in Europe on average? In the US the carriers donut to lock you in as a customer for 3 years.

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ObjectiveElefant@reddit

I’m on a family plan and we just switched carriers. 2/3 of us got “free” phones with the switch. They really are free, as long as you stay with the carrier for 3 years. That being said, you need to keep the same phone for 3 years or buy a new one outright. You can’t sell the other phone until the 3 years are up, or you can pay off the rest of what they haven’t yet paid (they divide the cost into 36 payments and if you want to own the phone, you pay however many are left). In that case, you can get a new phone through them at a discount and either sell or trade in the old one. You can always buy a new unlocked phone whenever you want. They also have add ons you can buy that will allow you to upgrade every year. So you’d have your “free” 3 year device and after a year, you can give that phone back and get another either for “free” or a lower amount than you’d pay for an unlocked device. That really keeps you locked in w the company. The thing is, if you want to switch carriers, the carrier you want to switch to will often offer to pay for the rest of what’s owed on your phone. In this case, you bring that phone w you and use it with their service. You don’t get the offer of a “free” phone with service. You’re basically just switching your remaining balance to them and can upgrade when those months are up (if I understand correctly). Hope this made some sort of sense! It’s really up to the person. I have always bought my phones through Apple with the Apple credit card and avoided any interest. Because I was with my carrier so long, I would’ve saved money if I had gone through them.

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Phones are hundreds to thousands of dollars and we cannot afford to pay that up front.

Plus we have credit scores and paying off a phone in your name can actually build a credit score.

A Credit score is a number that represents your credit activity. It's a really messed up system though. Even having someone officially check your credit score can bring down the number.

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Icey-Emotion@reddit

We use a discount plan and buy our phones outright and pay monthly for a plan we can cancel at anytime.

Most people I know are on contract plans for a specified time frame with their phone integrated into that price. They are super pricey.

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anonymous_fart5@reddit

I turned in my 3yo phone and my carrier gave me a new one free

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The_Motherlord@reddit

A large swath of the population are overextended. Even people that earn over $200k a year have more debt and more bills than their salary can accommodate. The average American does not have savings to cover a $400 unexpected bill. That's not just the seemingly poor, that's the higher earners as well. Most Americans live off of rotating debt. I've known many people that consider how much credit they have access to as a measurement of their wealth, not how much they have in savings or investments.

People get phones on installment plans because they always want a new phone and they never have the cash to buy one outright. The option is not between buying with cash or and installment plan, it's which installment plan...on a credit card or via the phone service provider.

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Saltpork545@reddit

Some do, some of us don't. I've not bought a phone plan and phone in over 15 years and never expect myself to do it again.

I buy my phones outright and keep them for 5-8 years, then buy it again.

This way I can use the phone companies and plans I want and get unlocked phones by default that I then flash and install custom OS on.

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2_minutes_hate@reddit

Probably. I just buy one every 5 years or so in cash. I don't like being tied to a phone plan.

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metamucil_buttchug69@reddit

Only the poor

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jonesdb@reddit

They give me offers like “we will give you $800 over 3 years for your 3 year old iPhone 14 Pro” and discount on new phone on top of that.

I only pay $7/mo out of pocket for my iPhone 17 pro. Technically there is a payment plan, but a generous offsetting monthly payment from the carrier for my old iPhone 14pro.

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jackfaire@reddit

Accurate. Because if I had to drop the full amount of the phone I would be saving up for months meanwhile not having a phone.

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El_Polio_Loco@reddit

I mean, there are significantly less expensive alternatives that wouldn’t require months of saving to be affordable.

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I don’t know though… I used to get cheaper phones but had to replace every few years. I’ve had my current phone like five or six years and it’s fine. But it cost $1000. Maybe it balances out?

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PartyPorpoise@reddit

Yeah I try to avoid budget electronics these days. A lot of them just stop working after a pretty short time. Although I still haven’t got up the courage to buy good headphones yet.

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Hell_of_a_Caucasian@reddit

It does. That’s what these $200 phone people miss. I have an iPhone, and I’ll probably have this thing for years.

I’ve given in and tried androids twice over the last 20 years. Both times they’ve started messing up within a year and a half and became bricks after two years.

They’re $200 because they’re absolute junk.

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El_Polio_Loco@reddit

$200 maybe, but a $600 pixel, or Oppo, or OnePlus are all going to last the 4 or 5 years that even an iPhone Pro will last.

The ripped off portion was my landline phone company deciding that my $10 a month phone bill needed to suddenly become $60. Far as I could tell they figured if cell phone companies could charge that much they could too.

Instead a bunch of us switched to cell phones and they ended up later dropping the price back down.

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El_Polio_Loco@reddit

Yeah, the only people I know who had a landline were doing it because it was basically free with their internet and cable.

The second it was anything other than that it’s gone.

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jackfaire@reddit

Why the fuck would I buy a $1500 phone?

But also I have been living paycheck to paycheck for 20 years I can't just drop $200 on a new phone either. That's a big chunk of money to suddenly have to come up with.

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El_Polio_Loco@reddit

Anyone you see with an iPhone pro max is basically spending $1500 on a phone.

I’m sorry for your personal situation, and I would presume you’re not the person in the scenario who’s using a $100/month phone plan to pay for a flagship phone.

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jackfaire@reddit

I'm not but I still have to make monthly payments to afford a phone. My situation is improving but slowly.

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PAXICHEN@reddit

BUT PEOPLE WANT to spend $1,500 on a phone and interest free loans make it a hell of a lot easier to do. Hell, I buy my phone from Apple, use my AppleCard and get 3% off (and I buy it in NH where there's no sales tax), and I pay it off over 12 months. It's more of a cashflow thing.

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Many do. I don't even have a contract with a carrier, I prepay long term and buy older phones online for very cheap. Is the $180 pixel 6 I got online in like new condition gonna wow anyone? Absolutely not. Is it good enough for my daily use along with a year long prepay of unlimited everything that comes out to like $21/month? Absolutely.

These days, non-contract services don't have those incentives unless you play the carriers' stupid, silly games, and don't really work out to any sort of savings unless you're willing to stay on top of things. My time is worth more now than when I was younger, and the simplicity of dealing with Apple directly (and my ability to get a 10% discount) and making payments directly is worth a lot more to me than dealing with stupid carrier games.

tl;dr: when a flip phone cost a significant part of my income, I like carrier subsidies; now that an iPhone is nearly (not entirely) inconsequential, I just buy the thing outright.

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brute1111@reddit

Because phones are a status symbol here, and they cost accordingly. Also most people are tech illiterate and are unaware that they can get a perfectly fine experience paying way less. Just look at iPhone commercials. The phone flies around the screen with cool music and people having fun, nary a word about the tech specs. It's easy to convince tech morons that they're good. Look at the shiny object!

I've never paid more than $200 for a phone, I'm always on a prepaid plan , and always buy my phone myself off Amazon and transfer the SIM card myself. My refurbished pixel 6 has been going strong for several years now. But I'm also an engineer, so I'm not tech illiterate. I make over 100k, so it's not like I couldn't afford it. It just feels like burning money to me.

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Darkdragoon324@reddit

Yes, it’s very common
Because we’ve all been gaslit that our only options are an iPhone or the most expensive Android. There are plenty of phones more people could afford to buy outright if they knew to look.

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seancbo@reddit

Yep. I got a nice upgrade on a deal with a carrier. It's essentially the same price I was paying, but I got a "free" phone as long as I stick with this carrier for 3 years, which I have no reason to not do. And if I want to switch at some point, a lot of carriers will cover the breakup fee.

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Snoopy20111@reddit

I just got a new phone! I was planning to buy it outright while getting on a new phone plan, but doing the math for what the carrier offered, the phone was 1/3rd the price over the payment period.

It's not just Americans. Most people regardless of the country are stupid.

The logic they use "I need a plan either way so I'll just get my phone with the plan?"

Many do. I have not made installment payments since 2020 when $300 phones became as good as flagships I previously owned.

Shopping habits are different in the US than in many other places. Twenty years ago in Dublin and Edinburgh, most tiny grocery/convenience stores offered "topup" (I don't remember if that was the same term in both places) cards. I imagine they still do. That makes sense for urban communities designed for walking and public transport, because buying phone minutes was a convenient part of the regular trips to pick up bread or juice while out and about. It worked that way in larger cities in the US too, but for the suburbanites and rural shoppers who buy their groceries two or three times a month with bulk purchases from their SUVs, they didn't like that system as much.

The succesful mobile phone businesses in many countries marketed to people who wouldn't have otherwise even had phone service (particularly young people), while the successful companies in the US were the ones that convinced people to transition from the system they were already using. The model of a regular bill that was the same each month looked better to older people. Businesses would rather pay for their employees phones by subscription because it becomes a brick when they fire people.

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Bubbly_Following7930@reddit

So I don't have to shell out all the money at once.

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arcticmischief@reddit

I trade mine I every 3 years, and AT&T usually gives me like $1000 off the next phone, but only if I finance it over three years. If I try to pay it off early, I lose the incentive. So my $1500 iPhone Pro Max whatever cost me $15 a month or $500 over three years instead of $1500 upfront. Works for me.

Yes, we're sort of made to think it's free in many cases. People can get a $1000 phone without paying anything up front but they'll be locked in to a 2 year contract and pay more per month.

parkour267@reddit

If they say no you are absolutely getting ripped off haha

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CaptainAwesome06@reddit

No. Available data says about half of Americans buy their phones on installment plans. But I think it's important to note that the carriers often have discounts or upgrade packages if you do this. Consumers get a cheaper phone, or at the very least, a phone that they can pay off over 3 years with no interest, and the carrier gets a locked in customer for 3 years.

professorfunkenpunk@reddit

I’m paying 5 bucks a month for an iPhone 16e. It was a no brainer

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kurai-tsuki@reddit

Phones are $500-1000 usually, and most Americans don't have that much in savings let alone would be willing to put it on a credit card to pay 20% interest on. The carrier loans you that money for free

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MrsNoodleMcDoodle@reddit

I have had the same carrier since 2007. I can afford the latest and greatest phone cash, but an interest free loan is too good of a value proposition to pass up.

There really isn’t really anything to gain by switching carriers in the US. The plans are priced competitively.

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Loud_Inspector_9782@reddit

I buy a phone and then pay a monthly fee for the service and internet.

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StoneyLaw830@reddit

All the carriers are still the same. We’ve been with AT&T since before I was even born, back when cell phones were considered a premium add on to your home phone plan. All the carriers are spin-offs of the original telephone company from 100 years ago and mostly work the same and charge within a few $$ of each other.

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Throwaway-ish123a@reddit

I feel it used to be this way but now that's changing. I bought my phone full price from Amazon, unlocked.

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LazyAmbition88@reddit

I do both, depending on the offers.

Sometimes I buy direct from the manufacturer and pay up front, if my carrier does not offer a good deal. This was a lot more beneficial before my carrier offered good international plans — so I often needed to be able to switch sims while traveling.

However, there have been a handful of times when my carrier lets me trade in my old phone (even if I bought direct) and get a brand new model for “free.” Of course the free part is the payment plan, where they charge me $35 a month but also give me a $35 discount each month — so I benefit from a free $1,200+ phone and they benefit by making sure I stay their customer for the next 3 years.

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blanknullvoidzero@reddit

It's definitely the standard way people buy phones.

This is only partially accurate. In Europe you get your phones unlocked and it’s culturally more common to get pay as you go phone service instead of long term contracts.

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79215185-1feb-44c6@reddit

culturally more common to get pay as you go phone service instead of long term contracts.

In the US it's not really much different. It's all about herd mentality - you do what your peers do. From 2013 to 2025? I had a Prepaid plan with the same carrier. I brought my own phone. I also didn't upgrade my phone every year. Now I have a contract (contract is with my ISP's mobile plan) and I pay less for the same service (even outside of the promotional period). I also bring my own phone here, but it's actually more expensive in the long run than paying for one through my carrier (about 33% less the last time I checked).

People will just do what they are comfortable with, which is likely what they heard about from a friend x years ago. Changing things that aren't broken isn't really important.

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Dandylion71888@reddit

Pay as you go is becoming more popular but despite your experiences, it wasn’t always like that. Now days people don’t want to be tied to contracts etc.

With that said, I own my phone outright even though I am on a contract because I travel internationally a lot and need my phone unlocked.

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Professional-Pungo@reddit

I don't really understand your point.

I would say the people that buy plans are usually much smarter, unless the interest rate is mad high, which for a phone it usually isn't. you can even get one with 0% interest sometimes.

no real reason to pay 1000 at once for a phone if you can pay 50/month for 24 months or whatever it ends up being.

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79215185-1feb-44c6@reddit

People don't think this much. You are overthinking the situation. People literally just do what other people do and rarely if ever change their habits.

This isn't an American focused thing. All humans act like this and it seems to be a very reddit/online thing not to understand due to the lack of actual physical social interaction that people seem to have on a regular basis.

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Zeverian@reddit

Not only did you lose the point, you tried to pretend you were right. And you hide your history. And your account looks purchased.

Looooosssserrrr

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79215185-1feb-44c6@reddit

Awwww sweetie got filtered because they can't look up my posting history. How cute.

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Sitcom_kid@reddit

We don't have Carphone Warehouse prices here

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ccagan@reddit

I’m on a discounted loyalty plan with Verizon. It would cost me $900 over three years to upgrade today with trade in to go from 16 Pro to 17 Pro with the same storage.

I can just trade in directly with Apple and get the phone for under $600.

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Swimming-Book-1296@reddit

Yes, and its common, because it is a lot cheaper.

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Early_Apple_4142@reddit

People like living at what they can "afford" on a monthly payment.

Additionally, for the longest time, the carriers had some sort of deal with the phone companies that you couldn't buy your phone outright for a period of time anyway or at least that's what they told us. They used to say you had to at least make 3 payments before you could pay the phone off. People end up in payments and don't pay the phone off, and continue the upgrade cycle because their bill doesn't change.

I bought my and my wife's most recent phones outright and it took significantly longer than it should have for them to accept it and take my money.

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enraged768@reddit

Yeah because for instance I currently have an s24 ultra. Its on a carrier installment plan but its monthly payment is zero dollars if I maintain the service for a certain amount of time.

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Responsible_Side8131@reddit

It’s common because the carriers offer good deals and provide discounts on the phone when you buy it thru them as a way of making you stay their customer.

My son’s phone on my plan for example. He has a Samsung phone that would have cost around $800 to buy outright. Instead we “bought” the phone on my plan, and it ended up being “free”. They charge my plan something like $25 a month and then give me a $25 credit on the same bill. BUT if I cancel my service with them, I have to pay for the phone. So I’m stuck with them until the 24 months is over.

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TheJokersChild@reddit

You can afford to buy your phones outright since iPhones are probably not as much of a thing there as they are here, and you can probably buy Chinese brands like Huawei and ZTE, which are banned here under the government's notion that Chinese companies are threats to national security for stealing our data.

When you go to one of our three big carriers' stores, almost all they offer is Samsung and Apple, with maybe a Motorola Razr or two thrown in. And their inclination is to steer you toward a Galaxy or an iPhone 17 or 18 Pro. Either way, it's over $1000. So to help you afford it, they add a monthly installment to your plan so you don't feel the hit as much, but it can still be an extra $30 or more onto your monthly bill over 3 years. Samsung and Apple also routinely offer $800-$1000 trade-ins to make the phone a lot less expensive (and lock you into their ecosystems), so that payment can be less than $10 a month. No interest like if we put it on a credit card.

Phones are locked to their carriers until they're paid off, also. But we can get around that by going to Best Buy and picking up an unlocked phone from Blu or Motorola. Nothing and OnePlus are also options, so we've got the flexibility to switch carriers whenever we want.

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Ponklemoose@reddit

If my carrier offers the phone at the same price as the manufacturer but also offers a 24 month 0% loan why wouldn't I take the deal?

The cancelation terms are: pay the balance, still without interest.

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brokensharts@reddit

I just did yesterday.

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LivingGhost371@reddit

It sounds better to us then opening our wallets and spending $1000 at once on a new phone.

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not_wall03@reddit

I got all of my recent phones for $0 + tax and a 3 year contract. They were flagship phones worth $800. It's a nobrainer

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Crayshack@reddit

Buying a phone for the full price up front and then taking it to a carrier to put it on a plan requires dealing with two different vendors to get me a working phone. I hate the process of shopping for a phone enough that I was willing to pay a little bit extra if it meant not having to deal with a second vendor. I could simply walk into a single shop and say, "make it work."

That's in addition to the fact that it's far cheaper to do it through the carrier. I just looked up the price of buying an S26+ from Samsung, and it's $1,124.99. Getting the exact same phone from Verizon is $5.55/month for 36 months, which comes out to $199.80. No idea why they make it that much cheaper, but they do. It's working as a loss leader to get you to stick with their service.

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Mysterious-Mango4936@reddit

I buy mine outright from Apple unlocked. Then I pay a small fee to upgrade when upgrading. The only thing is that I must ensure there is absolutely no flaws on the phone itself. So I have to also invest heavily in screen protectors etc to keep it looking like new when time to trade in. Most I think just use carrier services to upgrade because most aren’t in a financial situation to just drop a thousand on a new phone outright..

Sometimes it's cheaper to buy through the installment plan. My mom relatively recently bought a galaxy s26. I think at the time it was about $900 outright so instead she did the 3 year plan AT&T was offering which was $10/month. This total cost only comes out to $360 which was much cheaper.

Most do, trade ins are another incentive. Depending on how new the trade in you might get the new phone for basically nothing.

I buy mine outright because I don't like being locked to a carrier. I also still have a physical sim so I can swap to an old device if I break this one.

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MyUsername2459@reddit

Is this accurate? And if so, why is this so common?

Yes. That's the normal way to get a cellular phone in the US.

Most people don't want to spend $1000+ up-front for a phone, and paying for it over several years through their phone plan is generally preferred.

Cell phones are absurdly expensive, they aren't things you just casually buy. If your choices are to pay $1000 right now, or pay $40 a month for two years, most people will go for the two-year plan.

Carriers generally let the payments be spread out, interest free, over at least two years.

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PinchedTazerZ0@reddit

I fuck up a lot of phones and don't really care about anything other than unlimited data/5G/text/call. I'm off grid a lot so I'm not too worried about coverage

My current phone was $250 outright and came with a year free of unlimited service because I was a new customer lol. Camera zoom sucks but it's more than functional for work and music so it's fine

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I always buy mine from Apple directly

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LiquidDreamtime@reddit

Through ATT an iPhone air is $8/mo for 3 yrs. It’s like $1500 out right.

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unus-suprus-septum@reddit

Most do. I used to go on eBay and find which Pixel is around $100. Last couple have been $200 because prices have gone up. Keeps me a generation or two behind, but well worth it.

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According-Gazelle@reddit

Some of them like Mint and US mobile have ridicolous offers.

Our family buys unlocked phones, but we also don't spend thousands on them. I recently bought a new Motorola Edge 2014 for under 250, and I can't imagine why anyone needs more phone than this.

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Not_an_okama@reddit

I did this. The carrier had an incentive that saved me $500 overall. 0% apr if i dont miss a payment which i havent.

My old phone couldnt hold a charge through a full day of field work and i usually have to take pictures when im in the field. (Note that field = industrial site most of the time)

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BusyBeinBorn@reddit

We have three generations on the same phone plan. My wife and I, our oldest daughter, and our parents. That’s about the only way it makes sense. If you’re just paying for one line, you can get the whole year of service through a prepaid plan for less than $300/year and buy your phone outright. When you start adding lines though, the big carriers are a better deal.

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Klutzy-Comment6897@reddit

Yes and it’s common usually because people are bad with money or at least have cash flow issues and won’t settle for a cheaper phone.

Carriers love to lure people in with promises of discounts and at face value it could look good let’s say the payments equal 50% of what you would pay for an unlocked phone. However, then they normally require you also to have a higher level cellular plan which probably costs more than you need. People just look at the phone cost but don’t think about the service cost.

I have a $45 a month plan. I had looked at options for the iPhone 17 pro max and could have gotten one at like 75% discount BUT then I’d be stuck for 3 years with a $110 dollar a month phone plan which over the term is either break even or paying more.

And well then the other issue is people don’t have 1k up front to pay but won’t settle for a more basic phone so they use the plan as financing.

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cyvaquero@reddit

Many carriers will reduce the cost of the phone if you do that - it helps ensure lock in to their service for X months. For instance, the last time I switched they gave us five new iPhone 13s. Every month they billed an installment and then billed a credit, this ensured we stayed with their service for the 36 months. To be frank, we wouldn’t have switch if it wasn’t for the free phone offer.

paycheck to paycheck

I hate this misunderstood idea so much.

It is, objectively, untrue.

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be_you_tiful-@reddit

Where I live, we get to pay more than twice the price Americans pay for the same phones and you gotta pay upfront all cash. No credit exists.