Most adults can’t afford a $1,000 emergency expensive. That means very few people can hand over cash for a brand-new iPhone.
“(My phone) is going to be mine once I get through paying for it,” explained Mary Deberry, a Memphis resident.
For years, Apple customers like Deberry have been able to work toward owning their iPhones by making small monthly payments.
For the first time ever, Apple is allowing customers to lease certain devices, including phones. The financing is through Klarna. This new option would allow customers to pay between $17.99 and $31.99 a month for a 24-month lease. There’s also a more expensive 12-month option. If a user trades in their phone, they may get a lower monthly rate.
“It didn’t really surprise me,” explained Teresa Murray, consumer watchdog director for Public Interest Research Group. “Apple products can be kind of pricey.”
Murray told FOX13 this option might work for a person who insists on getting the latest model every year.
“If you’re the kind of person who wants to have the latest, greatest, newest, shiniest iPhone and you’re going to want a new one in a year or two, then maybe leasing might make sense for you,” she said.
However, she recommends everyone read the fine print. According to Apple, you will pay fees if a phone is lost damaged or stolen. A Klarna spokeswoman told FOX13 a missed payment will not impact a customer’s credit score. However, after three consecutive missed payments, Klarna will terminate the lease agreement and the customer “will need to pay the full outstanding balance.”
Customers must also remember that they will not own their devices at the end of the lease, “unless (they) pay the purchase fee.”
“It’s really to entice people who to spend more than what they can afford,” explained Travis Moody, the CEO of Forward Memphis.
If a family is struggling with other bills, Moody recommended they work toward paying off a cheaper phone.
“If families are strapped for cash, it’s probably more affordable to get an older phone that costs less,” he explained.
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