Jack
Why is it that Americans are so easily tricked into two year contracts and upgrade plans? When you look around to buy a smartphone, it gets confusing. Two year contract? Upgrade plan? What about data, how much of that do you need? I'm here to tell you that you've been phone shopping all wrong.
Most Americans would go to a major wireless provider like AT&T, Verizon, Sprint, T-Mobile, and US Cellular to purchase their smartphone. This is sort of weird, isn't it? I mean, you wouldn't buy your car from the company that sells you gas. When you buy a phone from your carrier instead of the manufacturer, most of the time you're going to be taking out a loan from the carrier. That $200 phone isn't actually $200, it's closer to $700, but the carriers make you pay the rest back and more over the course of your contract. Well if you don't buy your phone from your carrier, where do you get it? And where do you get the plan for it?
Try to look for the words "unlocked" and "off-contract" when searching for the phone you want. You can usually either find them on the manufacturer's website, Best Buy, or other online retailers. Once you find that, you're ready to start looking for a plan. While many top carriers sell cheaper plans without the need for a contract, MVNOs (mobile virtual network operators) can sell plans much cheaper than the big guys. Now, MVNO may sound like a foreign word, but I'm sure you've heard of them. Companies like Straight Talk, Net10, Boost Mobile, Virgin Mobile, and many more are all MVNOs. They use the major carriers' networks such as AT&T, Sprint, and T-Mobile, letting you have the same quality for a fraction of the price. How is this possible? They pay the major carriers to use their cell towers and resell their wireless service for cheaper. This means you can get individual 5GB data plans for less than $50 per month.
As an example I'm going to use Net10 and an unlocked GS6, and compare it with the price of buying the same phone from AT&T (with a 2-year contract) over a two year period. Both plans include unlimited talk and text.
Unlocked Galaxy S6 = $649.99
Net10 5GB service = $45/moPhone and service over two years = $1729.99
2-year contract Galaxy S6 = $129.99
AT&T 5GB service = $90/mo
Phone and service over two years = $2289.99
There are many other factors to consider, such as upgrade plans, other options from carriers, and how long you're going to use your phone. Net10 does not lock you in any contract, and if you want to cancel, you can. What's better, you own your phone. If you buy a phone from AT&T, they technically own it just like the bank owns a house you have a loan on. Buying no-contract from AT&T isn't a good idea either. In fact, it actually comes out $95 more than the 2-year contract version. MVNOs and unlocked phones are almost always cheaper in the long run. So stop thinking that "free" or $200 phone is actually that price, pay the money for it up front, and stop losing more money than you need to every month!
I also buy unlocked for this very reason with iWireless. I buy a new phone every 2-3 years, and save a lot of money, and it angers me when my friends bluntly state "I had to buy my phone too, it cost me $100! :(" and I have to respond "No, I ACTUALLY bought my phone, your parents are paying the other $650".
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