What is Phone Financing?

Buying a phone on finance allows you to buy your phone on payments over a specified period rather than ordering it in one go. This is normally done in the US through the following:

1. Companies such as Verizon, AT&T, T-Mobile provide carrier installment plans

2. Retailer financing schemes such as Apple Card Monthly Installments / Samsung Financing

3. Buy now, pay later services such as Affirm, Klarna or PayPal Credit or third-party lenders

4. Personal credits or credit cards

Each of these has its conditions, advantages, and drawbacks.

Carrier Installment Plans: The Most Popular Route

Most Americans who buy a new phone from their wireless provider choose carrier installment plans. Here’s the way it works: You choose your phone, agree to pay it off over 24 or 36 months, and the cost gets added to your monthly bill. A typical 0% interest rate usually accompanies these plans, so you’re paying the full retail price of the phone, just in installments over time.

Key points to remember:

1. The phone is usually “locked” to the carrier until fully paid.

2. Taxes and activation fees are due upfront, and monthly insurance can add $10–$20.

3. Upgrade schemes are available on certain plans, with an opportunity to trade in for a new device after a designated time frame.

Retailer Financing: From the Manufacturer Direct

If you want to buy straight from Apple, Samsung, or Google, several have their own financing plans. Apple Card Monthly Installments, for example, lets qualifying shoppers pay for an iPhone on 24 months with no interest — and rewards you with 3% cash back if you pay with Apple Card. But since 2023, ACMI now requires you to select a carrier (Verizon, AT&T, T-Mobile, or Boost) when you check out to get financed devices.

Samsung financing is treated similarly, 0% APR promotions for 24 or 36 months — but credit approval is tougher in 2025, and nearly all promotion comes with bundling other Samsung products.

The advantage:

1. Phones tend to come unlocked at purchase (except when sold with particular carrier promotions).

2. No service plan required in addition to device financing.

Buy Now, Pay Later (BNPL) Options

BNPL items like Affirm, Klarna, and PayPal Credit allow you to break up payments into convenient installments. The terms are very varied: Some offer 0% interest on promotional periods, while others charge interest (sometimes greater than with standard loans).

Example: Purchasing a $1,200 phone purchase with Affirm, the customer may be given options such as $100/month over 12 months at 0% APR - or 10% APR, depending on credit.

Warning:

1. Late payments may bring late fees and will only damage your credit score.

2. Some plans require large down payments on flagship devices due to their high cost.

Personal Loans and Credit Cards

Another path is using a personal loan or credit card. While flexible, these options usually come with interest unless you’re using a promotional 0% APR credit card.

Consider this only if:

1. You have strong credit and can secure a low-interest loan.

2. You can pay off the balance quickly to avoid long-term debt.

What Kind of Credit Do You Have to Get a Phone Financed?

Financing a phone in the United States typically requires at least good credit (roughly 580–669 FICO score). Carrier and store deals will be more forgiving, but third-party lenders and personal loans will require good to excellent credit to get the best rates.

If you don’t have credit or bad credit, some carriers have “flex pay” or prepaid installment plans that don’t involve a credit check — but you might have to pay a deposit.

Final Thoughts

Financing a phone in the United States in 2025 offers more choices — but more small print. Whichever way you take it, whether through a carrier, a maker, or a BNPL player, know the terms first. The right plan can get you to enjoy a new-edge phone without breaking the bank, as long as you know the full price and payment terms.