Be careful if you are financing through Moto

[diesteldorf]

Just wanted to share my experience:

Opened a Moto Credit account in 2013 and was given a $1000 limit--plenty high for a phone, watch etc.

Ordered 2 Moto X Developer Editions when they went on sale for around $325 each.

Since each one was under $599, I had 12 months to pay back around $700 after taxes.

Paid it back leisurely in about 9 months.

It's a decent option, since you always have the option of paying more than the minimum monthly payment. In my mind, the only real decision would be if you are OK with opening another credit card.

However, assuming your credit is already decent and you aren't planning to take out a huge loan or buy a house, it probably won't have a huge affect on your FICO score.

It also helps that I normally only upgrade once per year and that coincides with their release of new flagship devices, so I am not tempted to buy more stuff during the year.

It's not like a Target or Penny's card, where you have to worry about fall and winter fashion and the latest and greatest sales....lol

 

[Clocks]

It's not like a Target or Penny's card, where you have to worry about fall and winter fashion and the latest and greatest sales....lol

That dreaded "my wife has the target card in her purse" feeling....

 

[alphabets]

Just wanted to share my experience:

Opened a Moto Credit account in 2013 and was given a $1000 limit--plenty high for a phone, watch etc.

Ordered 2 Moto X Developer Editions when they went on sale for around $325 each.

Since each one was under $599, I had 12 months to pay back around $700 after taxes.

Paid it back leisurely in about 9 months.

It's a decent option, since you always have the option of paying more than the minimum monthly payment. In my mind, the only real decision would be if you are OK with opening another credit card.

However, assuming your credit is already decent and you aren't planning to take out a huge loan or buy a house, it probably won't have a huge affect on your FICO score.

It also helps that I normally only upgrade once per year and that coincides with their release of new flagship devices, so I am not tempted to buy more stuff during the year.

It's not like a Target or Penny's card, where you have to worry about fall and winter fashion and the latest and greatest sales....lol

Nailed it. That's basically exactly when and why I opened my Moto Credit line as well.

Also, don't knock the Target Card, especially the debit version. No line of credit opened or affecting your FICO score, but all the same benefits as the credit version. 5% off all purchases, free online shipping, extended returns, etc...and just like using your debit card. Win-win.

 

[thejesse]

Technically the smartest way to buy a phone would be to save up the purchase price, then finance it at zero interest. Make sure your saved money is earning some kind of return, use it to make only the minimum monthly payment until the end of your no interest term, then pay off the balance.
Of course at today's interest rates your earnings probably wouldn't be worth the hassle.

Posted via the Android Central App

 

[leebut]

While I understand what you're saying, but what's the difference between that and taking advantage of 12 or 18 month interest free promo through Motorola's credit program. As long as you stick to the monthly payment that'll have you paying it off before the interest free promo ends, it's essentially the same thing as saving money every month, IMO

G4'ed it!

The difference is not being in debt, and possibly missing a payment, and not having to remember when the money leaves your account. Nobody knows how secure a job really is, and sometimes things do get forgotten or misread.

 

[Almeuit]

The difference is not being in debt, and possibly missing a payment, and not having to remember when the money leaves your account. Nobody knows how secure a job really is, and sometimes things do get forgotten or misread.

Very true but that is a responsibility the person must take upon themselves. I for one know every bill, when it comes, and when it is due. Same goes when I sign up for financing things -- so for me (and others like me) it works out very well. Tossing $100 a month is better than $400 up front.

 

[Raptor007]

Pay the carrier monthly or pay moto credit monthly, one keeps you locked down until you pay it off in full and you may or very likely may NOT be able to use said phone on another carrier or have limited radio band use. The other allows you to use to change carriers, have a phone that works on any (US) carrier and you are not locked down. Both offer 0% financing if paid within the payment window. Both require you to pay your bill on time like an adult but one allows you to pay it off quicker and still move to another carrier the other requires you to pay monthly or pay the whole balance off and again be left with a limited use device.

 

[Ry]

Both require you to pay your bill on time like an adult

lol. Thank you.

 

[AlexMadarasz]

I would check the terms of your financing, it could be a lump payment is required at the end and if you fail to pay it before the 18 months expire you can expect a charge for the entire financing totaling another couple hundred dollars due to the 28.99% financing. Just because they set the minimum payments at $25 doesn't mean you can keep paying $25 every month and avoid interest as once you hit 18 months the full finance charge will hit if you have any balance outstanding.

Correct, I just let it happen to me (for one of my 4 Motorola Credit purchases over the past year) and it ain't pretty if you don't pay close attention to your Motorola Credit statements ....

Pay particular attention to the "PLAN EXPIRES" date under "Details of your plans" on page 3 - these are the anniversary dates of your purchases (each purchase of a particular device is labelled a "plan"), and you must pay off the balance for that plan by that date, or the nasty number under "TOTAL ACCRUED INTEREST" for that plan will be charged to you on that date, the remaining balance for that plan will convert to a revolving credit account (at 28.99% interest) AND you will start piling up some serious charges from that point.

DON'T get complacent about the minimum payments - track the "PLAN EXPIRES" dates and pay off your remaining balance(s) before that date or you will be hating your financial life!

--
Alex

 

[thunderup]

I've purchased lots of stuff like this. Tires, appliances, TVs, etc. It's pretty simple and if they're going to let me basically borrow money for free, I'll do it. They tell you how many months you have to pay it off interest free. Take the total price and divide by that number of months. Boom, there's your real monthly minimum payment if you wish to avoid the large finance charge at the end. Ignore the minimum monthly payment on the statement, you won't get it paid off in time using that number.

 

[sulla1965]

Yeah nothing wrong with using Moto credit or Paypal etc. The 0% interest and 12 -18 months to pay beats having to pay all upfront and out of pocket. Those who complain are those who don't understand the 0% is depended on your paying it off within the 6-12-18 months. They miss a few payments, and end of adding serious $$$ to the cost of the item . So just don't get careless and you'll be fine using promotional financing.

 

[alphabets]

Exactly. Pay your bills like a responsible adult and you're basically receiving an interest free loan. Financed both of my Moto X's through Moto credit without issue.

 

[Adiliyo]

This isn't really related to the OP's topic, but here's what I don't understand about Motorola's financing: I bought the 64GB Nexus 6 and financed it for 18 months. My payment is $25/month. After 18 months I will have paid $450. When does the balance of about $300 come due?

I don't really care that much. I have the cash from the sale of an iPhone and could have paid for it all up front, but I decided to use the financing since it was available and no cost. But I'm curious to see how it spins out.

$25 is the minimum payment due, it has nothing to do with the promotional financing. to make sure you don't incur any interest, you need to manually figure out how much to pay to pay off that balance before 18 months is up

 

[sulla1965]

$25 is the minimum payment due, it has nothing to do with the promotional financing. to make sure you don't incur any interest, you need to manually figure out how much to pay to pay off that balance before 18 months is up

Good point, that's another point some don't understand. The minimum payment is just an amount given to keep the account in good standing. The min payment doesn't come close to paying off the entire debt. So people pay the min every month, then get surprised when the promotional 0% APR runs out and becomes 29% or something outlandish like that.

 

[cwise222]

When you select the pay with Moto credit option, or whatever it's called, it will even give you the amount you will need to pay each month to pay it off in the zero interest period. Mine was like $41 and change I think.

 

[Adiliyo]

When you select the pay with Moto credit option, or whatever it's called, it will even give you the amount you will need to pay each month to pay it off in the zero interest period. Mine was like $41 and change I think.

yea i think it was originally around $43 and they do tell you on the product page.

i'm kind of surprised people don't know how these promotional financing deals work before they enter into them.

 

[cwise222]

yea i think it was originally around $43 and they do tell you on the product page.

i'm kind of surprised people don't know how these promotional financing deals work before they enter into them.

Most of the time the way they display the promo offer is in a shiny, amazing looking ad and they expect you to just get caught up in the flashy graphics and 'no interest' keywords and not pay attention to the rest and it works all the time. I know I got a credit limit way, way above what anyone would need for a phone or from Moto in general (it's literately 10% of my yearly income) and they very much pushed me to buy more stuff.

People see no interest and these finance companies give a sky high credit limit and people just go crazy with shopping without reading the little text.

 

[Adiliyo]

Most of the time the way they display the promo offer is in a shiny, amazing looking ad and they expect you to just get caught up in the flashy graphics and 'no interest' keywords and not pay attention to the rest and it works all the time. I know I got a credit limit way, way above what anyone would need for a phone or from Moto in general (it's literately 10% of my yearly income) and they very much pushed me to buy more stuff.

People see no interest and these finance companies give a sky high credit limit and people just go crazy with shopping without reading the little text.

but it's not even long! haha i get what you're saying though. but if i'm going to drop $1000 on stuff, i'm going to know the terms of the loan i'm getting for it.

they gave me a crazy high limit too, but i guess if you're a couple or family, a few phones and a few watches and some accessories could add up

 

[Ry]

yea i think it was originally around $43 and they do tell you on the product page.

i'm kind of surprised people don't know how these promotional financing deals work before they enter into them.

I was surprised at the thread title. It's not that different from any other promo financing deals. :/

 

[Almeuit]

I was surprised at the thread title. It's not that different from any other promo financing deals. :/

This -- Right on point. .