Quick Links
Carrier contracts seem like an affordable way to break down your smartphone purchases. However, having been burned by such plans in the past, I now always pay for my phone upfront. Doing so is less expensive and puts me in control.
1I Don’t Want to Be Tied to a Long-Term Contract
Many phone contracts I’ve signed have been multi-year subscriptions, and I don’t like the idea of being tied to a product for that long. It’s different if I’ve bought a yearly subscription for an app I already use or have a rolling monthly contract; both are easy to cancel, and you have no obligations after you cancel.
You can get out of a phone contract early, and the rules for this will depend on your mobile provider. But most of the time, you’ll have to pay off the remainder of your contract at the very least. Moreover, you sometimes need to pay cancellation fees and the like.
Since buying my phone upfront and getting a monthly rolling contract, I’m infinitely happier. Ironically, I’m also more likely to stay with my current network provider because I have the flexibility to leave.
2You Pay More for Your Phone When It’s on a Contract
After signing my first phone contract, I quickly realized that I was actually going to pay more for my phone than if I had bought it outright. I also had a full-time job at the time, which—while quite low-paying—would’ve allowed me to purchase my phone upfront within three or four months of saving. Sadly, the 21-year-old version of myself was quite impatient.
We can argue that the extra cost also covers the mobile service that you receive. But even then, I don’t think you get the best value. Many low-cost SIM carriers are just as good as the big providers, if not better. You’ll save money as a result. If you’re worried about others seeing the provider’s name, I’m telling you that is purely your ego speaking because nobody intelligent will judge you.
You also can’t even see the name on some devices these days, and the carrier will likely use a bigger name’s network anyway. For example, while I use Lebara, my phone says Telenor (one of the main network providers in my region).
I also don’t want to pay extra interest. If inflation is pretty bad one year (as it was in 2022 and 2023), the amount you pay goes up even more. So, whileflagship phones are often very expensive, getting them upfront is still better than financing them.
3I Don’t Like Feeling That I’m in Debt
I vowed when I was 16 never to get a credit card because I never wanted to feel like I owed money, and to this day, I keep my debt at an absolute minimum. The only long-term thing I have to pay off is my college degree, and I have no interest in adding anything else to that list.
Every time I signed up for a phone contract, I constantly felt like I was in debt and owed money. As a result, I got more defensive and tried saving money beyond what was reasonable. This would’ve made sense if I couldn’t afford it, but I had money coming in every month and very obviously could.
Not everyone is like me, but I think it’s a good idea to keep your debts as low as possible (you can usedebt management appsto see what you owe). This is especially true if it’s something completely avoidable, like your phone contract. Whether it affects your credit score or not doesn’t matter; knowing that you owe this money each month can get exhausting.
4I Want to Choose My Network Provider
When you sign a long-term contract with a network provider, your device is often locked. And while you canget your carrier-locked phone unlockedfor free in the US, doing so is time-consuming. You’re much better off buying your phone outright and picking a new provider when you feel like it’s necessary, even if an unlocked phone costs more.
5I Can Sell My Phone if I Want
You don’t need to upgrade your phones every year; I normally keep them for at least four years if they’re working well. However, I sometimes want to upgrade sooner. Not being tied to a carrier contract not only means that I don’t have to pay off the rest of my deal, but I can also sell my phone if needed.
Even if you sell your phone while it’s on a contract, you still have to continue your payments. I don’t have this problem with an unlocked device that I paid upfront for. As a result, I can sell it more quickly and with less hassle. It’s also just as easy to buy a new phone.
6I Don’t Want to Be Pressured Into Upgrades
This point is a bit of a contrast to the previous one, but I want to upgrade my device whenever it feels right forme. While you can keep your old mobile plan after paying off your device, carriers will often try to get you to upgrade. This makes sense logically; they want to keep you as a paying customer for longer.
Because I pay for my phones upfront and choose a network provider’s monthly plan, I don’t need to worry about external influences pushing me toward an upgrade. When I feel the time is right, I’ll happily do so myself. But if I’m happy with my current phone, I don’t see the point in changing to something I don’t need.
7I Don’t Want to Add Another Monthly Bill
I’m very aware that I pay a monthly subscription for my mobile internet, but the price is significantly lower than a mobile contract. When I’m financing a phone, I effectively have two bills the way I see it. While I’m happy to spend money on things that add value to my life, paying monthly for a phone makes no sense.
The initial payment for an upfront phone purchase is definitely substantial, and it sometimes hurts to see that much money go out of my bank account. However, I’d rather just be done with it and not get annoyed seeing the contract costs go out. I also had the underlying knowledge that I couldn’t actually afford the phones I was financing, which annoyed me even more.
While financing a phone might seem like a good idea at first, it’s less cost-effective, and you also don’t have much flexibility. Paying for a phone upfront means it’s all yours; you can choose the provider you want and when you want to upgrade without pressure.
