T-mobile has caught on with the notion that the economy sucks and they want to help. Introducing the “Equipment Installment Plan” or EIP for short which will allow qualifying individuals to purchase the phone of their choice and pay it off in four monthly installments. Apparently, it seems right now that you can walk out of the store with no money down, and expect that first payment to charge to your next bill – a wonderful “tool” for the “buy now, ask questions and worry about how to pay for it later” kinda person. Soon, you will have no excuse NOT to buy the most expensive phone in the store, and breaking the news to your significant other that you bought YET ANOTHER phone should be a little easier.

Exciting, huh? Now for the nitty gritty details…

While paying four monthly installments may seem pretty straightforward and easy to calculate, it’s not a straight “the phone costs this, please divide by four” type of situation, rather, it’s only slightly more complicated than that. Out of what we know of the EIP as it is now, there will be a certain type of “credit limit” (if you will) extended to each customer, and either the difference between your credit limit and the purchase price of the phone is charged to your first bill -OR- the total purchase price divided by four monthly payments is charged to your first bill, whichever is GREATER. The other three monthly payments would equal the remaining balance divided by three and would all be the same. See? It’s not THAT bad. So, depending on your credit line, a $200 phone could potentially cost you $100 down or it could just cost $50, or something like that.

Even better, your “credit line” will increase with each monthly payment you make (exception: overpayments do not count towards credit line increases, sorry), so the more you use the Equipment Installment Plan then the cheaper your first down payment will be. Just be sure you pay at least the amount they calculate for your monthly payment (overpayments are not penalized) or else your account will be marked as “Delinquent” and nobody wants that.

On a final note, it appears that Flexpay customers will actually be able to participate in this, so it seems like all bases are covered. I would certainly urge anyone thinking of partaking in the installment plan to manage your finances wisely and not run out and purchase a phone only to find you can’t meet the monthly payment (say hello to Mr black-mark-on-your-credit-report) but certainly feel free to take advantage of it if you have the financial means.

Now, please don’t go calling customer care or running to your local store to see if they have this… it’s not out yet. You’ll know when we know.

Update: As far as we know, there is no APR for this at all. Just a payment plan split up over four months, nothing more.