As smartphones get ever more amazing, they also get more expensive. While you can of course carve up the cost into monthly instalments with a contract to a phone network, not everyone wants to do that -- the best deals often tie you in for two years, and many of them involve overpaying for the phone over the lifetime of the contract.
OnePlus has just introduced a different way to divide up your phone payments, and we're interested to hear what you think of it.
OnePlus has teamed up with finance company Klarna, better known (and a little controversial) for pairing with companies like ASOS to make it easier to buy a tonne of clothes you don't need and can't necessarily afford.
Smartphone-wise, the new system will allow OnePlus customers in the UK to buy a phone now and either pay for it later or split the cost into three equal instalments. The options appear directly on the purchase pages of the OnePlus site.
Here's how the 'pay later' option works:
With Pay Later, you can buy OnePlus accessories and swag to the value of £500 and delay your payment by up to 30 days afterwards. Klarna will send you an email with payment instructions once your order is shipped and instructions to follow the link in the email to view your order.
And the three-way instalments:
Slice it in 3 allows you to spread the cost of your purchase over 3 equal payments – interest free. The payment for each instalment will automatically be collected from the debit or credit card you entered at checkout. The first instalment will be collected when your order is confirmed by OnePlus and instalments 2 and 3 are scheduled 30 and 60 days later, respectively.
On the one hand, this seems like a good thing: it's interest-free, so seems better than whacking the purchase on a credit card balance that you're then going to pay compound interest on. However, it does also make it really tempting to buy a phone that you can't actually afford -- lots of us think that while we don't have the money for a new phone now, we tooooootally will as soon as we get paid next month, forgetting all the other things that money is earmarked for.
OnePlus doesn't mention what happens if you don't make the payments on time, but the 'slice it' scheme is available elsewhere and has some concerning outcomes if you miss payments:
Some retailers offer a Klarna product called ‘Slice It’. This lets customers pay in instalments over three to 36 months. Failure to pay results in three warning letters costing £12 each (!!!) and if non-payment continues, a debt collection agency will intervene.
While Klarna’s standard pay-later option only conducts a soft credit check, Slice It conducts a ‘hard’ credit check which will leave an imprint on your record. This can impact your ability to access everything from credit cards to mortgages. Slice It also opens shoppers up to late payment fees. Failure to keep up with instalments could see a customer having to pay interest of 18.9%.
£12 warning letters? That interest-free deal isn't sounding quite so rosy now.
What do you think of OnePlus and Klarna's tie-up? A good way for financially responsible people to avoid committing to a phone contract, or another way for people who aren't good with money to get themselves in trouble?
We think it's a bit of both, but we'd love to hear your thoughts in the comments.