The Truth About Carrier Phone-Buying Plans

article by Arya A. author
The way the cellphone industry provides customers with service and cell phone deals is in the middle of a complete overhaul. While cell phone carriers will claim that the new options are simple and easy to understand, that is very far from the reality most consumers are currently experiencing.

If you are on the hunt for the cheapest cell phone plans and find yourself awash in confusing language that you don’t understand, check out our breakdown of the major options currently available from carriers like AT&T and Verizon Wireless:

Phones That Come With Your Contract

Cell phone carriers know that purchasing the newest cell phone is a major expense. To help you avoid it, many will offer you a new phone for free when you sign up for new cell phone plans with them. This usually comes with a catch – you must remain with the carrier for the duration of the contract (usually two years), or pay an exit fee to leave early. However, when the two years are up, you own the phone outright.

Early Upgrades

Cell phone plan deals like this offer the benefit of allowing you to pay a little bit every month towards ownership of a phone, while still offering the flexibility to upgrade sooner. Because cell phone carriers are still looking to make money on every phone you use, the contracts attached to an early upgrade plan require careful scrutiny. It can be a great option, but it often comes with a lot of fine print.


This is one of the best cell phone plans for individuals who want to constantly upgrade to the newest technology. Instead of purchasing a phone, a lease allows you to essentially rent a phone from your carrier on a month to month basis. Because you aren’t locking yourself into a contract or paying to own a phone, this plan offers great flexibility. If something new comes out, you can hand your old one in with no questions asked. The drawbacks of this plan are that you will never actually own the phone, and will need to constantly transfer your accounts and contacts every time you make a switch.

A Financing Plan

If you don’t want to lock yourself into a long-term contract, you can choose to purchase a phone via monthly payments over the course of a set time period. In general, you will need to make payments over the course of 24 months. Although you will need to remain with your carrier for the duration of the lease period, you will own the phone after the final payment.

Purchasing a Phone

Although this will often cost you more than a contract, financing plan, or lease it’s also the most simplistic option. You don’t have to worry about being locked into a carrier, will never be surprised by a confusing contract provision, and can own your phone outright from day one. If you value the peace of mind that comes with no strings attached, this is a great choice to consider despite the additional cost involved.