Why did cell phone companies switch to paying for phones rather than giving phones at sign up or a low cost phone?
In: Technology
Due to the rising cost of hardware, companies would give the phones out as part of the plan, charge you a little more since its hard to justify a 1500 ollar phone.
Then people started ticking up phones and not paying their bills.
At least from what I’ve seen, so many credit scores got ruined by those deals. They would get a super nice phone they didn’t need, or they would tick up a couple and sell them off, with no intention of paying.
Previously- the cost of the phone was built into the plan price – so what seemed like a free phone wasn’t really. Then came the race to the bottom – a quick way to compete was to advertise lower prices and an easy way to do that was to decouple the cost of the phone from the plan – in reality you’re actually paying about the same if not paying more now than you were then but they get to say that you’re saving on the cost of the plan.
There is a plus side – if you decided to keep your phone after the payment period or you buy it outright, then you’ll save.
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