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Remember those days when we signed up for 2-year mobile phone contracts and sometimes timed our recontracting period with the release of the latest phones?
Nowadays, telcos offer SIM-only, no contract plans. Naturally, we switch to them as it just makes more sense — you don’t need to be tied down by a 2-year contract and have the flexibility to switch telcos whenever there’s a good offer. Sure, you may miss out on the “zero-dollar” phones or the phone subsidy that people on 2-year plans enjoy, but you can enjoy these cheaper “no frills” SIM-only, no-contract plans… goodbye to those $80 or $100/month expensive 2-year contract plans!
The catch is that nothing lasts forever, including smartphones. You’d eventually need to replace your beat-up Samsung, iPhone or whatever phone you’re using… yes, I’m referring to the one with the cracked “spiderweb” screen and battered case.
So off you go, to source for your own device, whether it’s from the official store, resellers or elsewhere that starts with a C. And when you find what you want, you can opt to pay for it upfront in a single lump sum or in installments via your credit card, if offered by the store or reseller.
Why would someone choose to pay for something in installments?
Paying for something in installments enables you to buy a big-ticket item like the latest smartphone without having to save up a big lump sum of cash beforehand. This makes managing your cashflow a bit less stressful, as you get to slowly pay off the cost of your purchase over a number of months.
Even if you can afford to pay for your entire purchase upfront, you might still decide to pay in installments if you can get better returns on that lump sum. For instance, if you invest the lump sum while gradually paying for the item in installments, you could find yourself in a better financial situation overall.
Is a store/reseller’s installment plan similar to a telco’s device plan?
Some telcos offer device plans that let you pay for your phone in installments over a number of months. And these telco device plans can actually be a very good deal. But what’s the difference between paying installments via your credit card to a store/reseller, versus getting a device plan with your telco?
Let’s say you want to buy a new phone and pay for it in installments.
There are 2 main ways you can do this: By purchasing the phone through a telco’s device plan, or by buying it from an external retailer and then paying through a bank’s installment payment plan (via your credit card).
Here’s a table summarising the key differences between the two:
|Device plan (from telco)||Installment plan (from bank)|
|Contract lock-in period||No||Yes|
|Early termination charge||No, just pay the balance||Yes|
|Affects credit limit||No||Yes|
|Total cost||Cost of phone (you might even get discount from the recommended retail price)||Cost of phone + interest (if any) + admin/processing fee (if any)|
As you can see, a telco’s device plan enables you to purchase a phone from them and pay in installments, with 0% interest and no upfront payment or lock-in. Contrary to popular belief, you may not even need to use the telco’s services when you buy a phone through one of their installment plans.
By contrast, banks’ installment payment plans are much more rigid. Once you have agreed to a payment schedule, you are locked into it. If you wish to terminate the plan, you’d likely be slapped with an early termination fee. In addition, the bank may charge interest and/or processing fees. Money borrowed through such installment plans might also be taken from your available credit limit, which can cause cash flow issues when finances are tight.
Case study: StarHub’s EasyGo Device Plan
If you’re looking for a straightforward device plan, StarHub’s EasyGo splits up your phone repayments into installments with no hidden fees. For instance, if you buy a $1,200 phone on a 12-month installment plan, you will pay $100 per month over the next year, and that’s it.
StarHub’s EasyGo device plan was specially designed for StarHub’s SIM-only plan users, empowering them to buy new phones and pay for them in installments for up to 24 months, at 0% interest, $0 admin fee and no contract.
If your SIM card is from a different telco, don’t worry, as you don’t need to be an existing StarHub customer to use the EasyGo device plan. You can simply present a soft/hardcopy of your past 3 months’ telco bills at your nearest StarHub Shop to buy a new device.
Now, let’s say you want to get a Samsung Galaxy S21. Here’s how much you could save with EasyGo, as compared to buying it on a 2-year contract plan (we’re using StarHub’s Mobile+ as a comparison) or through an external retailer.
Buying a Samsung Galaxy S21 phone
|Mobile+ $65 2-year contract||SIM-Only + EasyGo device plan||SIM-Only + Device only|
|Cash upfront payment for phone||$499||$0||$1,248 (lump sum); or the same amount + any fees if by installments|
|Monthly cost of mobile plan||$65/month (Mobile+ plan)||$20/month* (SIM-only plan)||$20/month* (SIM-only plan)|
|Total cost of ownership (based on 24 months)||$1,959 ($399 + ($65×24))||$1,678 ($1,198 + ($20×24))||$1,728 ($1,248 + ($20×24))|
|Contract lock-in period||24 months||–||Depends on payment method|
|Device early termination charge||Pay high penalty fees||No penalty, just pay for balance of the phone||–|
|Savings (vs Mobile+ 2-year contract)||–||$281||$231|
*StarHub is currently running a $20/month SIM-Only plan promotion till 31 December 2021.
As you can see, those on SIM-only plans buying the phone through StarHub’s EasyGo device plan enjoy more savings, compared to those who get their phones via a 2-year contract or from an external retailer.
Tip: You can further reduce your instalments if you trade-in your existing phones at StarHub shops at attractive valuation!
Being with a trusted telco also means you get other perks
Other than lower prices, there are other perks that you can enjoy when you buy a phone through StarHub’s EasyGo device plan.
For instance, you get a free month of the SmartSupport add-on, which gives you 2 device swaps or 1 replacement and 1 swap, with free delivery to any location in Singapore within 4 hours. Gone are the days of being left high and dry should something happen to your phone.
SmartSupport also gives you one-click access to StarHub’s tech support team from 9am to 6pm daily, enabling you to get help with backups, data transfers and more.
In short, if you’re a SIM-only user, you can save even more money on your new phone with a telco’s device plan, such as StarHub’s EasyGo that lets you pay for your new phone in installments of up to 24 months with no interest or added costs.