Such,a deal? by Gary Woods
As we all know the shelf life of a cell phone is about 6 months. Just about the time you get your new cell phone all dialed in and you're loving it to death along comes a new one which makes that one you're carrying around in your pocket a worthless piece of junk.
The problem is that your contract has another 18 months to run before that new jewel can be yours. So, what do you do if you want a new phone sooner? To help us out some of the cell phone companies came up with plans that would let us get new phones quicker so I thought I'd look into how those plans work.
T-Mobile has their "Jump" program which requires a $150 down payment on a smartphone with the rest of the hardware balance paid over 24 months which comes to $20 per months. Then, there's a $10 up-front charge for a SIM card and on top of that there's a $10 monthly charge for being in the Jump program which includes insurance against loss or theft. Your $10/month buys you the privilege of upgrading to a new phone after 6 months provided you've paid off at least half of the your current phone's price.
AT&T's "Next" plan does not require a down payment, insurance or a SIM card fee. But, whereas T-Mobile's phone was amortized over 24 months AT&Ts has to be paid off in 20 months which means the monthly charge is $32 and you can't trade in the phone until after 12 months instead of 6 with T-Mobile.
Verizon's "Edge" program like AT&T's requires no down payment, insurance or SIM card fee but is spread over 24 months instead of 20 so the monthly fee goes down to $27 per month. You can upgrade after 6 months with Verizon as long as you've paid more than 50 percent of your current phone's price.
The common thread with all these phone plans is that they're not subsidized. For example if you buy an iPhone 5S after waiting out your 2 year contact it's $199.99 but if you use Verizon's "Edge" program you pay $450. If you buy a Samsung Galaxy S4 at the end of your contract you will pay $149.98 but if you buy it using the "Edge" program you pay $650. Get the picture?
It's definitely a cool idea to get a new phone every 6 months to 1 year but you need to know that you're paying a lot of money for that privilege. As they say, do the math!
If you have any suggestions or questions for me please drop me a note at firstname.lastname@example.org or see my column on the Internet at http://www.santabarbaraproperties.com or call me at (805) 729-0910
Gary Woods is the Computer Trainer for the Santa Barbara Association of Realtors. And he is a Broker/Associate at Home Realty & Investments, Inc