5 Things To Understand About The End of 2-Year Cell Phone Contracts

With much fanfare, Verizon announced that they are abandoning two year contracts for their new customers! I've long stated that the 2-year contract would and should fade away because of lifestyle changes and consumer trends.

And now we are here. Verizon isn't the first company to abandon 2-year contracts (think, pre-paid phones) and they certainly won't be the last (think, 2-year contracts disappearing altogether in 5 years).

So what does this mean for you and how can you take advantage of this cool deal? Here are five things you need to understand before you get your next phone.

1. No contract is a GOOD thing.


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Because technology is advancing at a rapid speed, you want to have as much flexibility to move with your needs! A 2-year commitment no longer works best for how businesses and individual people must maneuver! Out with the old and in with the new!

2. Do your homework (really) because your phone is no longer subsidized.


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Paying $200 for a new iPhone is probably over. Previously, the rest of the full iPhone price was covered in the 2-year contract. Expect to pay full price, which is around $600. This means you should do much more tire kicking to make sure you can get the most out of your technology investment. Yes--it's an investment.

3. Plan to have your phone for a longer period of time.


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Phone companies have conditioned us to get a new phone whether or not we truly need one. Now that you will most likely pay full price instead of contract price for cell phones, you may want to make those phones last much longer. The longer your phones last, the longer you can get the most out of it. You'll also give yourself more time to save for the next great phone.

4. Cell phone insurance is a must-have.


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Pick the right insurance because it's no longer an option. Because you are now making a much larger investment, you need to protect it. Get the insurance this time around because grabbing the next phone when you drop your current one in the toilet may not be as easy in terms of price and selection.

5. Buy the right data plan.


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I believe the data plan is more important than the phone and still needs to be re-visited and fixed by cell phone companies. Until then, you'll have to be smart choosing the options they've given. Verizon’s new monthly options are:

- $30 a month for 1GB of data (a joke)

- $45 for 3G (a little less than the average user)

- $60 for 6GB (the safe zone, but too expensive)

- $80 a month for 12G (crazy and wasteful use of your data)

According to Verizon:

The data can be shared between as many as 10 devices, but customers must pay a flat monthly fee for each mobile device connected to the plan. A smartphone is $20 a month, tablets and Jetpack mobile hotspots are $10, and connected devices like smart watches are $5.

Imagine a family of four or business that still pays for their employees cell phones. This will get pricey quickly but can be navigated if customers remember they have the real power and influence.

Don't forget to use it or you will lose a lot of money and patience. We are getting more mobile not less so decide now how mobile you need to be and what you are willing to pay. Choose wisely.