LG Wireless Phone

When you give a deposit to a phone company due to a lack of credit. Does this deposit go towards something?

I just signed up for an ATT 2 year plan and had to pay a $500 deposit as I have no credit. My question is, does this deposit GO towards something, like the first blank months of your bill or anything like that, or does that money simply go away never to be seen agian?

Public Comments

1. No it doesnt. It is held in escrow in case you run into credit problems. After a period of time, and good payment history, you CAN ask them to refund the deposit...OR.. to apply the deposit to any outstanding bill or purchase, but only AFTER your initial contract has been kept...
2. The money does not go to anything. It is held as collateral against your account. When you close the account, the deposit might be applied to outstanding balance and any extra refunded to you. Check your contract to see if they will continue to hold the deposit or if they will return it after a certain period. My guess is that they will keep it until you terminate the service.
3. You don't pay bill, you lose deposit. Their type of insurance on you.