iPhone Users Should Nix 2 Year Verizon Contract

by Colin Berkshire

If you enter into a 2-year Verizon contract you are going to get screwed. Here’s the math:

  • When you buy an iPhone in a 2-year contract you get a $450 discount off the retail price. If you immediately terminate that contract you pay a $350 penalty, saving $100. But that isn’t really why you should terminate the contract.
  • When you add an in-contract phone to their most popular plans you will pay $40 a month. Over the next 24 months this will be $960.
  • When you bring a full-paid phone to Verizon you will pay $15 per month to add the line. Over the next 24 months this will be $360, or a savings of $600.

So even if you are not comfortable with signing a 2-year contract and then immediately canceling it if you just pay the full-price for your iPhone you will save the $360 in monthly fees.

In case you decide to go under a 2-year contract you should beware that they get you once again in the “end-game”. If you cancel in month 23 of a 24 month contract you still owe $120, or over 1/3 of the entire contract! Apparently, Verizon doesn’t consider a grossly distorted pro-rata program to be fraudulent business practices.

Verizon has one more “gotcha” up their sleeves: If you UPGRADE an existing line under a 2-year contract they will not allow you to terminate your contract unless you terminate and give up your phone number. They know how to play a good game of hardball. Their heart must be carved from cold stone.

So here is how to do it:

  1. Buy your new iPhone as a new line of service under your existing Share Everything account.
  2. Within three days of activating the phone call Verizon and cancel the new line of service. Offer politely to pay the full $350 termination charge, and tell them politely that it is your intention to move your SIM card over to your old line of service. DO pay the $350 termination fee when it shows up on your next bill. Play fair; play by the rules of the contract.
  3. Now, move your SIM card over from your old (out of contract) phone to your new (now not in contract phone.)
  4. Call Verizon back and ask that they apply a “Bring Your Own Phone” discount (usually $25 per month) to your line. (It’s only $15 if you choose a data plan under 10 GB, so consider applying some of the savings to upping your plan to 10 GB!)

Enjoy the savings, smart-you!