Verizon confirms move to 12-month payments for devices with no contract ties
This is a big change from the current policy that only covers tablets costing at least $349.99 and the Samsung Galaxy Camera. After the changes take effect, customers will be able to buy up to two gadgets, and whenever they pay off one of them they’d be able to immediately purchase a new one to fill the two device limitation.
"The first installment and finance charge is due at the time of purchase," the company said. "Subsequent installments and finance charges will appear on your monthly Verizon Wireless bill and will be listed separately from your other charges. Qualifying devices must be $349.99 or more per device, after all discounts and promotions and before taxes are applied."
T-Mobile’s Un-carrier initiative brings a radical change to the 2-year upgrade model used by US carriers and this obviously comes as a reaction to it.
37. TheMan (Posts: 448; Member since: 21 Sep 2012)
This is nothing like TMO's UNcola...I mean, UNcarrier initiative because Verizon is still charging you the same monthly fee as someone whose phone was subsidized (meaning the service fee includes the repayment cost of the equipment buried in the numbers).
39. tomn1ce (Posts: 166; Member since: 12 Mar 2012)
On top of the full price of the device and the same monthly fee as everyone else they're charging a finance fee...I knew they were up to no good in trying to mimic tmobile uncarrier idea...
40. MikeG77 (Posts: 397; Member since: 24 Nov 2008)
I knew Verizon would pull some crap like this. Here is a few simple solutions for anyone that may pursue this option.
1. Buy full retail.
2. Buy the phone 2nd hand from someone else.
If those 2 options i would recommend the finance option depending on what these so called "finance charges" are going to cost you.
48. ardent1 (Posts: 2000; Member since: 16 Apr 2011)
Verizon likes to nickel and dime its customers to death.
Since interest rates are really low, it might not be bad if the interest cost is less than 5%. Anything more than 7% in today's environment is highway robbery.
2. jcpwn2004 (Posts: 314; Member since: 18 Jan 2012)
so now you pay 350$+ for your device plus at least 150$/mo lol. I'm sure there will be plenty of extra fees with this too.
32. Rockbottom97 (Posts: 24; Member since: 08 Jan 2013)
That's not how it works. You have to purchase a device thats over $349.99. Then you divide the total price by 12. You will pay your 1st installment in the store or online, then your bill in the next 11 months will add each installment. You can pay off the device at anytime.
43. MikeG77 (Posts: 397; Member since: 24 Nov 2008)
I think your missing a very important point in the article in that they pay an initial finance charge as well as the initial installment. The question is that....does someone have to pay finance fees durring the next 11 months?
3. InspectorGadget80 (unregistered)
This is going too suck. I just hope at&t/sprint wont follow.
4. DrSchlotkin (Posts: 7; Member since: 17 Apr 2013)
Let me get this straight...
I can now purchase a phone at full price and pay a monthly finance charge directly to verizon..
How is this any different than say using a credit card to purchase your device? It isn't like Verizon is lowering their service charges for these non-contract phone lines. At least with a credit card you can earn points or other discounts.
Verizon really is making me sick recently. If I didn't still have unlimited LTE data, I would have left ages ago.
13. infinitemethod (Posts: 149; Member since: 04 Sep 2012)
It's like $2 or $2.50/month. Over a year that is less than the activation fee/upgrade fee they charge now. It also allows people not to be in contract and not have to deal with hefty EFT fees.
35. TheMan (Posts: 448; Member since: 21 Sep 2012)
Hmmm, there's a thought. Would this be considered a subsidized purchased? I think not, which would mean that one would be able to keep one's unlimited data plan on Verizon.
Think about it.
42. tomn1ce (Posts: 166; Member since: 12 Mar 2012)
Before I go ahead and pay full price to vzw for a device I prefer to buy the device somewhere else....
45. MikeG77 (Posts: 397; Member since: 24 Nov 2008)
I would say no this is not subsidized BUT it wouldn't suprise me if Verizon used this as an exscuse to take someone's unlimited data away.
41. trexnkrumpets (Posts: 45; Member since: 15 Jan 2013)
It's tmobile not verizon. Verizon just wants to be secure incase some of their customer decide to flock over to tmobile which... in reality probably won't happen. But! For some people these new "plans" can be beneficial IF you don't upgrade your phone every 2 years, but more like every 3-5 years. If they follow suit with tmobile they will lower the monthly charges by a OK amount. [nothing too drastic]
5. AndiAllDay (Posts: 14; Member since: 11 Apr 2013)
Scam, Scam, Scam! Any phone company will do every and anything to get money out of its customers!
17. Daftama (Posts: 609; Member since: 03 Nov 2012)
Lol. I dont maybe we are still locked until we pay it off which will take two years. If I got a contract and canceled it...350 for ccanceling 200 for phone 550 comes to the price of the phone..now how many ppl really cancel it. ..oh it doesn't change the price of the plan ot should be cheaper so your right which part is scam
18. Daftama (Posts: 609; Member since: 03 Nov 2012)
Sorry the fact they will charge more in tax and extra fees won't matter at all so what part is scam
27. McLTE (Posts: 804; Member since: 18 Oct 2011)
This whole thing is a scam!
I believe part of the argument for why the big US carriers charged more money was because of the device subsidies. Now that they are removing these subsidies, Verizon is obviously reducing operating costs by a significant amount.
So... where are our lower rates based on this new model?
There aren't any lower rates. Verizon is merely defining another way to F the customer.
At least T-Mo has/had a plan where if you bring your own device or buy one at full retail, you'd get a cheaper plan.
You KNOW Verizon will charge the same rates and now make you pay full retail for the phone.
And.. yes I realize that right now it looks like a way to buy phones early, but this is definitely going to be the model going forward.
33. Rockbottom97 (Posts: 24; Member since: 08 Jan 2013)
The device installment plan is a way for those customers that want to buy newer devices every year afford them. EVERY carrier wants to get away from subsidies.
Companies like US Cellular have huge debts for device loans right now because of all the subsidizing they have done and then losing customers that they can not afford to pay on those loans. They are currently pulling out of Illinois (Chicago Market) and retreating into Wisconsin.
T-Mo might be onto something, but the greater American public is so used to not paying for there phones that subsidizing devices will always be a part of wireless culture for a bit.
53. kaintae (Posts: 62; Member since: 14 Dec 2011)
Yes, wireless costs for the consumer, are going up. But that doesn't make this pricing model a scam.
It's optional. So if a customer is getting "f'd," it's by choice. Additionally, there's a reason tmobile has to drop prices. If all things were equal, they would have no competitive advantage over their competition. Their network is absolute trash.
20. kaintae (Posts: 62; Member since: 14 Dec 2011)
You could get the phone and immediately cancel. But there is still the activation/upgrade fee when you initially purchase the device.
I think this really only benefits the guys who have the unlimited data and don't want to extend their contract and lose that plan feature.
29. Whateverman (Posts: 3242; Member since: 17 May 2009)
And that's where the other shoe is going to drop. VZW has no respect for the term "Grandfathered", so I can see them just eliminating unlimited all together very soon. Just lost my new Every Two credit on the 15th, and unlimited data is the only perk left.
34. Rockbottom97 (Posts: 24; Member since: 08 Jan 2013)
There is only so much LTE spectrum to go around. (It's why you hear alot of info about Verizon's spectrum buys) If Sprint & T.Mo had the install base ATT and Verizon have they would not be able to support unlimited data. Verizon can't take away your Unlimited cause you signed a contract thats binding. If they wanted to take it away, they would have done so a long time ago. Verizon and ATT both hate unlimited data and its the only leg TMo and Sprint have left to stand on.
46. Whateverman (Posts: 3242; Member since: 17 May 2009)
True, but it's not like the unlimited users are all streaming Netflix 24/7. If an unlimited customer and a shared data customer both use 3GB of data in the same month, it cost VZW the exact same amount. The only difference is how much profit can be made, and lets face it... The shared data customer is the cash cow depending on his/her plan.
Verizon took away unlimited data to make room for new customers, I'm cool with that. I'm even cool with them charging a little bit more to "grandfather" unlimited customers. But what they've done is raise the price of every unlimited customers bill by a minimum $600 per year based on what device your willing to buy out right. And thats just one more reason why VZW sucks.
44. trexnkrumpets (Posts: 45; Member since: 15 Jan 2013)
Tmobile isn't allowing ANYONE to remain grandfathered in if you want a new device. Even if you signed up the day before the new changes took affect. Just so you know.
47. Whateverman (Posts: 3242; Member since: 17 May 2009)
That is unfortunate, but it still doesn't compare to the crap VZW does to it's customers. Tmobile is looking so good right now, I don't even think I'll wait for my contract to end. And it works fantastic in the areas I need it for. Win, win!
6. papss (unregistered)
Wait... What? Just so I'm clear, there is no more 2 year contract?
12. kaintae (Posts: 62; Member since: 14 Dec 2011)
They still have contracts. This is optional for the person who wants to purchase a device without a contract
7. evarod48 (Posts: 152; Member since: 30 Oct 2012)
I agree it is a scam. The previous price was supposed to be financing the price of the phone along with the plan, but now there's going to be the same price/month but with an extra fee to pay off the phone. So the price will go up, while the consumer receives nothing extra.
14. kaintae (Posts: 62; Member since: 14 Dec 2011)
I don't see how it's a scam. Anytime you finance anything, there's a finance charge. And it's not like they're not telling you about it upfront.
The price isn't going up at all. This option is for people who don't qualify to upgrade their phone, or who don't want a contract. The price is the same as it is/was for anyone that wanted to purchase without a contract.
19. Daftama (Posts: 609; Member since: 03 Nov 2012)
This a trail they are trying to get ppl used to in 2014 they will make it full force no options
8. terabyteRouser (Posts: 457; Member since: 18 Oct 2011)
I don't see what the big deal is.
Any time someone, essentially, lends you money, there is going to be some form of interest involved.
This should not be unexpected. If you don't want to pay interest, find a friend or family to loan you some money for a new phone.
9. terabyteRouser (Posts: 457; Member since: 18 Oct 2011)
the ads on this site are out of control.
10. WickedNiceGuy (Posts: 1; Member since: 17 Apr 2013)
Smart move by Big Red. As long as those Shareholders are seeing the stock continue to rise and as long as the top executives are making thier multi-million dollar bonuses, nothing else matters!
21. freeze9111 (Posts: 2; Member since: 17 Apr 2013)
For those on VZW who have grandfathered unlimited data, I wonder if this will be an option for phone upgrades, without having to move to a shared plan?
28. McLTE (Posts: 804; Member since: 18 Oct 2011)
For those of us on unlimited plans, this changes nothing really. I can alread buy a phone at full retail to keep that plan. What this allows is for me to pay Verizon payments instead of having to pay the cost up front, which is nice I suppose.
This is just a test though... I am fully confident that Verizon will implement this going forward and discontinue subsidising phones - but keeping the same rates. Yay for the consumer!
22. datsyuk (Posts: 179; Member since: 11 Jan 2012)
This is a nice plan to pay off phones for people that want to stay up to date.
But you're telling me the contract prices are now gone (save usually $400) and I still have to pay the same high monthly costs along with a $700 phone versus $200-$300?
26. 9NewsFlash9 (Posts: 2; Member since: 17 Apr 2013)
Funny from day one people cried about no contract but when people get the harsh reality about how much a phone will cost them people act surprised. The real criminals are the manufacturers. Cheap labor, cheap materials = high priced phones. To answer your question it's being slowly moved to the back burner
55. kaintae (Posts: 62; Member since: 14 Dec 2011)
The contract prices aren't gone. This isn't a change across the board. You have to qualify to even be able to do this
23. 9NewsFlash9 (Posts: 2; Member since: 17 Apr 2013)
OMG people this is nothing new. You could always buy a phone at Full Retail price and not be on contract. This idea is for those who cannot afford to pay for it up front. Again the no contract idea is nothing new.
24. superguy (Posts: 281; Member since: 15 Jul 2011)
Ok, let's review this "offer" from Verizon:
We can now go with no contract and pay the cost of the phone over a year. Sounds good at a start.
While we don't have all the info on the plan, it does appear that Verizon didn't make this customer friendly:
1) You don't get a break on the cost of the service even though they no longer have to cover a subsidy. So while Verizon doesn't have guaranteed revenue from a contract, they make up for that "risk" by charing the same rate as if the subsidy were there. In fact, these customers are likely to become "more profitable" than the contract ones. T-Mobile did this part right: no contract, no subsidy fees in the service.
2) You can only do this to 2 lines at any given time. Not bad if you're single or in a comitted relationship of some sort, but this really sucks if you have kids. Someone's always going to be under contract unless you pay a phone off quickly.
3) As others have said, the finance charge is crap. True, we don't know what it is. However, I see it likely to be in the range of a department store credit card - 18-26%. I don't see Verizon charging a flat fee as that would be like leaving money on the table, and they will be taking the risk of not getting paid for a phone. Unless you have no credit/can't get credit, there is no advantage to using this program over putting it on a credit card. If I use one of my credit cards with points attached to it, I at least get something for the interest I'm paying, and probably a lower rate. If I use a card like a Best Buy card, I can get BB points AND get at least 12 months no interest. Either one is likely to be a better deal that Verizon would will likely provide.
Long story short: You still pay for the subsidy, it's not usable for family plans, and you can likely get better deals putting it on some sort of credit card. Bottom line is I'm no better off than I am now with buying a phone outright with a credit card.
I'll pass, Verizon, until you make it worth my while.
38. Rockbottom97 (Posts: 24; Member since: 08 Jan 2013)
The finance charge is roughly $2.00 a month. Verizon is not a bank nor do they want to be a bank. They just have the capital behind them to fund something like this.
When you finance something from Best Buy - it's a 3rd party bank that handles the financing - Not Best Buy. They negotiate those rates and if you default on them, it's not Best Buy thats calling you. There out no money cause Best Buy paid that bank a fee to the bank to let the bank finance the charge.
Verizon is the only person left holding the gun per say if you default on paying your bill.
57. 14545 (Posts: 1290; Member since: 22 Nov 2011)
STOP IT ALREADY. No one is claiming verizon is a "bank". However, Tmo gives you an "interest" free loan in lieu of a contract to pay for the device. They don't charge you a two dollar fee for the "service". In addition, VZW is getting off by not lowering their prices in lieu of a contract either. So you are getting hit twice from VZW. First being the fact that you now have to buy the phone outright or "finance", and if you finance you get hit with a 2.00 fee. Yet, the plan prices stay the same as the contract plans. How do you not see this as BS? What do you work for VZW's marketing dept? That's the only way one would be on here defending for them like this.
61. Rockbottom97 (Posts: 24; Member since: 08 Jan 2013)
The device installment is designed to help people get a device that they either can't afford full retail or are between contract dates. That's it. Verizon loves there Share Everything plans so they will not be changing them at all. $2.00/month is a small price to pay if your up s**t creek and need a device today instead of looking through Ebay.
And no, i'm not defending them... but there's so much mis-information in these forums its incredible.
I hope TMo changes the industry. But it's an uphill battle.
25. freeze9111 (Posts: 2; Member since: 17 Apr 2013)
I'm just interested in whether going with this non contract purchase plan will come with a stipulation that you must be on a shared data plan...
31. Rockbottom97 (Posts: 24; Member since: 08 Jan 2013)
You guys. This payment plan was not designed to mimick T-Mo's new changes. It was designed to give people an option if they break, lose, or out of warranty device is still within there two-year contract and need another option or they want to not be under contract. This was rumored a long time ago when Verizon first started Device Installments on Tablets last year in October.
Also, every Cell Carrier in the US wants to do away with subsidizing phones. You 28 people that have so far commented on here don't represent the American consumer as a whole. If you understood how buying power works you would know we will never be able to get out of subsidizing phones cause were made of more Middle and Lower class brackets than those that can afford to spend $400+ for a smart phone.
You might have also noticed a trend in a lot of FREE devices on every carrier at the moment. Just looking at Verizon's webpage they have the LG Revere, LG Cosmos, LG Lucid 1, LG Lucid 2, iPhone 4, Nokia 822 all available for Free (Well, $30 upgrade free or $35 activation fee withstanding) Those offers drive most of the sales. Everyone of my friends that works in wireless will tell you they don't get 1000's of people asking about the Galaxy S4 iPhone 5s... They ask about what's free.
Okay, circling back...
On top of this new Device Installment, there is even a credit check to see if you can even do this too so its not offered to everyone. Just those that pass a credit check. The finance fee is $2.00 a month. Verizon isn't a bank and its not funded through any 3rd party. I've gone over this with Verizon Wireless before when I was thinking about getting a iPad4 on there service. I ended up buying it outright but for someone that wants to pay $50 a month it works.
Stop hating. T-Mo is not the savior of wireless. If they were, they wouldn't be just starting there rollout of 4G coverage in the United States.
36. JunitoNH (Posts: 1397; Member since: 15 Feb 2012)
You noticed, not a single mention of lower prices with this deal/offer. So.....you are purchasing the device within a calendar year, and still paying the same old high prices. Is no wonder the Verizon symbol almost resembles a sickle.
54. kaintae (Posts: 62; Member since: 14 Dec 2011)
Where did people get this idea that the carrier was supposed to reduce their prices because they're selling phones with installment plans?
58. 14545 (Posts: 1290; Member since: 22 Nov 2011)
Because that's what a nottobementioned carrier does.
60. kaintae (Posts: 62; Member since: 14 Dec 2011)
As a business owner, that company is the last I'd be looking at as a model of success in its class
49. Mr.Mr.Upgrade (Posts: 468; Member since: 30 Aug 2011)
I'm a Verizon customer. Its funny how most of you complain just don't buy Verizon knows what they are doing they are competing with carriers. They will at the very least try to closely match T-Mobile where if its a 10 or 20 dollars difference in monthly bills people won't leave them and more people will come to them. Best coverage by far
59. 14545 (Posts: 1290; Member since: 22 Nov 2011)
Sorry, but my bill WITH a 20% discount isn't within "$10-20" of Tmo. Not even close. Now they want me to pay full price also? No thanks.
62. Rockbottom97 (Posts: 24; Member since: 08 Jan 2013)
If your upgrade is past September 1st of this year, your upgrade date will line up with your contract end date.
68. cissi (Posts: 6; Member since: 13 Apr 2013)
Mine is December 27 and they haven't changed it yet so....