Having lived in a lot of countries over the past couple of decades, I can say this is absolutely something Americans do completely wrong. Just buy your phone at full price. The "free" phones cost significantly more than a full price phone.
In Norway several of the mobile phone telecom operators sell phones on down payment plans that cost nothing extra compared to buying it cash up front.
It has been like this for several years and it’s great!
You can pay a pretty low monthly down payment over a period of 36 month.
As far as I’ve been able to tell, I don’t even have to enter into any binding contract for any phone plan to buy the phone this way. And even if I did have to do that the most they are allowed to bind me to is 12 months, by law.
Consumer protection laws in my country are fabulous :)
> The "free" phones cost significantly more than a full price phone
I buy phones at full price, but in general the free/subsidized versions don't cost more. You just pay over time. For many people, it would even be worth it to pay somewhat more if they don't have the money to pay up front.
One downside though is that you're more likely to upgrade to features you don't need because "it's only an extra $5/6/10 per month". Gotta always consider the total cost.
I wouldn’t be surprised if they rip people off on cheaper phones, but for higher end phones the “free” phones are typically exactly the normal price of the phone split over 24 payments. Every time I buy a new phone I compare buying it directly versus via a carrier and it always comes down to which option currently has a promotion or sale I can take advantage of.
Is this an option that's available all the time? Back when the Nexus 5 was still new, I tried doing exactly this and took one I just bought to my local Verizon outlet to have it activated on their network. The tech there told me that while the phone DID have the hardware needed to be compatible on Verizon's network, he was "not allowed" to activate it for me unless I bought it directly through them. I've since switched to T-Mobile and never looked back.
That’s what I thought and did this for years. However, the major carriers do offer promotions and incentives that make the phones cheaper, sometimes significantly. e.g. of recent deal from major US carriers: iPhone 16 deal for $16/month for 36 months ($576 total) versus Apple store $699.
it's a lot easier to pay smaller amounts over time than it is to pay a large lump sum, even if it is technically less after x number of years. Delayed gratification etc, but also sometimes folks need a phone and can't put off the purchase until they save up the upfront price. T
Another label I fell for in the US was "lite" cooking oil. The fine print said "light in colour."
The "free" is just advertising and for people habituated to credit, it's a no-brainer. Pun intended.
I suspect that many Americans would struggle to afford to pay for a phone outright. The vast majority live paycheck to paycheck and are already in record amounts of household debt.
Huh? My Pixel 9 was free (late 2024) with a 20€/month 2 year contract that includes unlimited calls, SMS, and 5 gigs of 5G data. 480€ when the cheapest full price was over 500 (and then wouldn’t include the data or calls). Certainly not an American thing, and certainly not "significantly more".
My monthly plan payment would not go down if I brought my own phone.
It was also much easier to import cheap unlocked phones from abroad when the whole world used at most 4 frequency bands. Now there's several dozen and I don't think even the most expensive flagship phones support all of them.
To paraphrase a common phrase I've seen around here: The "G" in "LTE" stands for "global".