Since my mobile plan contract has recently already reached one year, I did some thinking and developed some thoughts regarding recontracting our M1/Starhub/Singtel
As we all know we buy a phone with contract is much cheaper than buying a phone without line, we usually change our handphone every 2 years. Telcos have also improvised on this, allowing us to get the promotional prices for our desired phones if our contracts have only been 1 year, by just adding $100. Some pple like this idea because they can change phones every year, some pple don't mind waiting for 2 years before changing their handset.
I have discovered it makes a lot of economic sense to extend your contract every after 1 year.
Let me use a very popular phone for example, the Apple iPhone 16GB. Handphone shops or "Ah Beng Shops" are selling a brand new one for $1198. You may be able to find cheaper, say maybe $1100. This price is without contract.
If you were to sign up a Singtel contract, maybe iOne Plus ($25.68 per month), you can get the iPhone at $748. Compared to buying without line at $1100, you save $350 by signing up a 2 year plan.
Now, if I currently have a Singtel iOne Plus contract which is already 1 year old, I can buy the iPhone at $748 + $100 = $848. This means that I can save $250 compared to buying without line at $1100.
The main crux is capitalising on this $100 which is the additional cost in order to renew the contract. This $100 is very cheap because I still save $250. If next year I extend again, given the same circumstances, I save another $250. This means that in a 2 year timeframe, I actually saved a total of $500 beause I renewed every after 1 year. Compared to waiting for 2 years for my contract to end and then renew it, I would have saved only $350 for a new phone. Thus in 2 years, I gained $150 more.
Some may think that they do not need a new HP every year. In fact many pple do. There's always other alternatives. Many HP dealers and shops offer cash to you for signing up new lines, something like $250 for a line similar to iOne Plus. Walk to Lucky Plaza HP shops to check out how much they offer for a brand new particular model before walking to Paragon M1 shop or Wisma Singtel shop, recontract your plan and get that model. Sell it back to the shop and you can gain at least $250.
You can even sign up the line at the Ah-beng shop itself, but they may quote you lower if you ask like that. Personally I also dont like to disclose my personal details to Ah bengs so I rather sign up with telcos, get the phone then negotiate with different Ah beng to see which Ah beng can quote me better price, or see which Ah lian prettier then I sell to her.
Althernatively, you can sell if off on internet buy/sell websites like eBay.com or hardwarezone.com, but subject to marketability, time and convenience.
Until the telcos realise that paying just $100 extra on top of promotional phone prices for extending contract is too cheap, it makes great economic sense for us consumers to extend contract after 1 year instead of renewing contract after 2 years. Hopefully they won't increase this $100.
P.S. I do know that after telcos offer only 21 months contract nowadays intead of 24 mths (2 years), but to calcuate in detail, we still earn by extending contract.
Showing posts with label Tips and tricks. Show all posts
Showing posts with label Tips and tricks. Show all posts
Saturday, November 15, 2008
Thursday, August 7, 2008
Getting free cheque books
Cheques are easy to use and a good replacement for cash. Today, it is widely used for various payments.
Often to have a chequing account, we must open a current account with at least $3000. If balance falls below that, then we must pay a penalty. If your balance falls below $1000, then you must pay $2 per cheque from 11th cheque onwards. This is standard among local banks. As for foreign banks, there are some special accounts like StanChart XtraSaver or Citibank Step-Up account, that gives free cheque books, but with conditions and strings attached as well.
So how to beat the banks? There's a saying, if you can't beat them, join them. Yes I joined them, they give me a free chequing account with no min balance required. If you don't want to join them, then there's another way.
I'm sure many have heard of credit line like Citibank's Readycredit, UOB Cashplus, OCBC Easicredit, etc. They are all personal credits with charges like 24% pa. They encourage you to use because they want to earn high interests from you. Many even come with free gifts, promotional interest rates, etc to attract you to apply for them. Now there's something that comes with these personal credit - free cheque books. The cheque book is given to you to use their credit line. They wont charge you for cheque books because they encourage you to use their money so that you will pay high interests to them.
The key is exploiting this personal credit. Firstly, apply for it daringly. There is no costs involved at all unless you touch their money. Once approved, you will receive a cheque book subsequently. You need to have a savings account in that bank also. For example, if you have OCBC savings account, then use OCBC Easicredit. If you have UOB Savings account, use UOB Cashplus. For convenience's sake, internet banking is preferred. So let's say, if you need to issue a cheque of $500, then transfer $500 from your savings account to your personal credit line using internet banking. This transfer is instantaeous because you transfer within the same bank. For example if your existing credit limit is 10,000, your balance will now be 10,500. This is called a CR balance, means you have positive balance of 500 which is your own money. When your cheque clears, you will not incur any charges because you are using your own money.
Remember never touch the bank's money (ie your credit line of 10,000), else you have to pay 24%pa interest for it. Best is to transfer money in before you issue the cheque, or transfer on the same day after you've issued it. Try not to postdate cheques also, may be bounced and hence chargeable. If you accidentally issued any cheque and forgot to transfer, rectify immediately cos they charge interests on daily basis. Then call the bank's hotline and ask them for waiver. If they refuse to waive, then no choice have to pay for your lesson, blame MAS.
Often to have a chequing account, we must open a current account with at least $3000. If balance falls below that, then we must pay a penalty. If your balance falls below $1000, then you must pay $2 per cheque from 11th cheque onwards. This is standard among local banks. As for foreign banks, there are some special accounts like StanChart XtraSaver or Citibank Step-Up account, that gives free cheque books, but with conditions and strings attached as well.
So how to beat the banks? There's a saying, if you can't beat them, join them. Yes I joined them, they give me a free chequing account with no min balance required. If you don't want to join them, then there's another way.
I'm sure many have heard of credit line like Citibank's Readycredit, UOB Cashplus, OCBC Easicredit, etc. They are all personal credits with charges like 24% pa. They encourage you to use because they want to earn high interests from you. Many even come with free gifts, promotional interest rates, etc to attract you to apply for them. Now there's something that comes with these personal credit - free cheque books. The cheque book is given to you to use their credit line. They wont charge you for cheque books because they encourage you to use their money so that you will pay high interests to them.
The key is exploiting this personal credit. Firstly, apply for it daringly. There is no costs involved at all unless you touch their money. Once approved, you will receive a cheque book subsequently. You need to have a savings account in that bank also. For example, if you have OCBC savings account, then use OCBC Easicredit. If you have UOB Savings account, use UOB Cashplus. For convenience's sake, internet banking is preferred. So let's say, if you need to issue a cheque of $500, then transfer $500 from your savings account to your personal credit line using internet banking. This transfer is instantaeous because you transfer within the same bank. For example if your existing credit limit is 10,000, your balance will now be 10,500. This is called a CR balance, means you have positive balance of 500 which is your own money. When your cheque clears, you will not incur any charges because you are using your own money.
Remember never touch the bank's money (ie your credit line of 10,000), else you have to pay 24%pa interest for it. Best is to transfer money in before you issue the cheque, or transfer on the same day after you've issued it. Try not to postdate cheques also, may be bounced and hence chargeable. If you accidentally issued any cheque and forgot to transfer, rectify immediately cos they charge interests on daily basis. Then call the bank's hotline and ask them for waiver. If they refuse to waive, then no choice have to pay for your lesson, blame MAS.
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