If you want a cell phone, student loan, credit card, or an apartment, chances are you’ll need to sign a contract. They have a major impact on your financial life!
What are contracts?
They’re a formal document that requires a signature in order to receive a service or make a purchase. They outline the expectations and rules or "terms and conditions".
For an apartment, the lease is a contract that states when and how much you will pay rent, and outlines how to deal with damages and notice to leave.
A contract is a serious legal agreement, with consequences. They have:
- Penalties if you don’t follow their terms.
- Serious consequences if they aren’t followed, like getting sued or affecting your credit rating.
- Fixed timelines, like a 1-year house lease, or a 2-year cell phone contract.
- Fine print that often shows costs you don’t expect.
Check out the know your rights as a tenant info page!
Know what you’re signing!
Read the terms and conditions. If you sign something, you should have a good idea of what you agree to.
Many contracts, like phone bills, have hidden costs. Look for:
- The interest rate for loans or credit cards (credit page)
- The contract timeline
- Service charges
- Monthly costs
- Administration fees
Cell phone plans
A zero dollar cell phone looks great at first glance! Zero dollars and a signature gets you a new phone and plan the same day. However, sometimes the cost isn’t as clear as a salesperson or ad might make it seem. You may be locked into the contract and have to pay penalties to get out of it.
Prepaid cell phone plans (sometimes called pay and talk) are a great way to get minutes and text without a commitment. They are often way cheaper than a monthly contract with data.
Shop around! Check out this website that compares cell phone plans for the major companies.... do your homework before you make your decision!