So i have AT&T. They now have implemented a new pricing model called "Next." Turns out, ALL the major carries are now doing the same thing. Brilliantly being sold to the consumer as a way to "free you from that awful 2-year contract," it is in fact increasing costs for all cellphone users!
I actually walked into an AT&T store on the day my two year contract was up, with $200 cash, and said that i wanted the latest & greatest cell phone. Turns out, no matter what i did, i would end up walking out of the store paying $20 MORE a month! How do you ask? Well, here's the MATH.
So previously, you had two options: You could buy your cellphone flat out, with no contract, or you could pay a smaller sum down, and enter into a two year contract. The carrier was effectively subsidizing your phone in order to ensure your business for the next two years. If you left early, or "broke" your contract, you'd have to pay a substantial fine. So this is how the math worked out before, ignoring taxes.
New HTC M7 - $600, no contract. Plan:$60/month. Cost after 2 years: $2,040.
New HTC M7 - $200, 2-year contract. Plan:$60/month. Cost after 2 years: $1,640.
So, essentially you are saving $400 per year just to be "on contract." That's a good chunk of money. And since cell phones last about 2 years, if you took good care of your phone, there was never a reason NOT to be under contract. A pretty good deal.
But turns out the carries got greedy. Without changing my plan, i wanted to essentially do the same thing i've always done, but with the newer HTC M9. I could NOT. What the carriers did is essentially DROP the subsidy, and spread your phone payments out over, wait, you guessed it, TWO YEARS. So your upfront cost is significantly less, but your monthly bill goes UP by the cost of the phone! No worries, you think. I'll just choose the subsidized plan, and pay the fee up front like before. NO DICE. Despite the markinting for setting you "free," if you DON'T choose their spread out cost, they'll charge you $20/month for NOT being on the plan!!!! Unbelievable.
Here are now my three options.
New HTC M9 - $600, no contract. Plan:$60/month. Cost after 2 years: $2,040.
New HTC M9 - $200, 2-year contract. Plan:$60/month + $20/month fee. Cost after 2 years: $2,120.
New HTC M9 on Next (2 years)- $25/month. Plan:$60/month. Cost after 2 years: $2,040.
The kicker in all of this is, that even though you are now "free," if you leave before you paid off your phone, you STILL OWE THEM MONEY for the phone! So it's the contract ALL OVER AGAIN!
The fact that not a single person i spoke to has figured this out shows how powerful the marketing is. Pretty crazy.
The takeaway here? The best bang for your buck is to simply BUY YOUR PHONE flat out. But make sure to get one that is UNLOCKED. That way, you are beholden to no man, and can switch carriers at whim to find the best and most cost effective phone plan for you.
And that is precisely what i did.
I am now the proud owner of a customized Moto X Pure Smartphone.
That's right. You can customize the build of your cellphone on-line, colors, capacities, and a host of other neatness-es. It will be delivered to your doorstep within two weeks.
Check out how to make your own here: Motorola X Pure Edition
And for the mere cost of $400, i am thrilled to be able to chart my own course in this hectic overly-corpratized crony-capitalistic cell phone provider world. THIS is the future of cellphones in the United States.
Here's my beauty:
To be truly free, you need only one thing: A good knowledge of MATH!