Hello @939051819,
Welcome to the community!
It means that device monthly finance amount is $42.80 and there is a promotion making the device $20/month but because the finance portion never changes $20.80 is applied as a bill credit to offset the difference of the device to make it $20/month.
Hello 939051819,
Welcome to the community!
It's a common misconception that the monthly cost of those phones are reduced. However, that is technically not the case. The device cost shown on the website and in promotions is calcuated after bill credit. The monthly cost of the phone remains the same but customers are getting a credit on their bill to offset the cost of the phone.
The bill credit is applied to the account and does not directly affect the actual monthly financing cost. In your case, the original monthly financing fee of $42.80 and a bill credit of $22.8 would calculate to $20 per month. However, the monthly financing fee does not actually change. You can view a similar after bill credit calculation here.
As noted in that link, it would be important to note that the monthy financing fee does not actually change. So the exact monthly amount for the device is $42.80 + taxes. If you choose to end the contract early, you would still be required to pay the total remaining balance of the device. That is, the remaining balance would be $42.80 x remaining number of months, not $20 x remaining months as the remaining monthly credits would no longer apply.
Hope this helps 😀
Cheers
Hello BobC83,
Welcome to the community!
@BobC83 wrote:
...When I buy discount Christmas food at the grocery store, the sticker says "Price: $2.00. Was $4.50." When I go to buy it, the receipt may show a $4.50 price with a $2.50 discount applied, but I don't get an exposition on how the price has remained the same but the store's applying a $2.50 credit to my grocery bill. They just say "It's on sale for $2.00."...
Well, no one is claiming that the phones are discounted, though. Your analogy is entirely different. The grocery store isn't giving a credit on your bill because the items are actually being sold at a reduced cost.
On the other hand, Fido clearly states that the advertised prices are after bill credit. There is no claim of reducing the cost of devices. If the actual cost of the devices were discounted, then that reduced cost would have to be reflected in the Full price of the device. They can't offer a lower cost for the device on contract while offering a higher cost for that same device when purchased outright. Fido's promotional offers include a credit on the bill to offset the cost of the device when financed. However, unlike your analogy, the actual cost of the device does not change
Hope this helps 😀
Cheers
Hello again,
Happy New Year!
Glad to hear you are able to follow my reasoning. Apologies if my explanation was poorly laid out. To clarify, though, I don't think Fido offers any financing greater than 24 months. As well, unlike some other providers' programs (ie Upfront Edge, Bring-It-Back, Device Return,...), Fido does not provide lease-type offers. They strictly finance the cost of devices with their Payment Program.
@BobC83 wrote:
...I also learnt in introductory finance that there's no such thing as 0% APR. ...
I understand some people might be skeptical about the no interest offers. I may not have any business degrees, but do the math. I believe the OP was referring to this device:
~taken from here as of January 2nd, 2023.
The original monthly cost is: Total cost divided over 24 months.
$1,027.08 ÷ 24 months = $42.80
The total cost of device in the advertised offer is: Monthly cost over 24 months plus monthly credit received over 24 months.
($20 x 24 months) + ($22.80 x 24 months) = $1,027.20
The total cost of the device is practically the same (any differences are due to rounding). Since there is no appreciable difference in the total outright cost vs the total financed cost, there is no interest being charged for financing devices.
Yes, as mentioned previously, if a contract ends early, the customer would still be required to pay the total remaining balance of the device. That is, the remaining balance would be $42.80 x remaining number of months, not $20 x remaining months as the remaining monthly credits would no longer apply.
Hope this helps 😀
Cheers
