Remember when the big cell phone companies used to give us a free phone for signing up for 2 years of service? Remember when those same companies killed off those service contracts, but started charging full price for devices? Then, do you finally remember when those guys figured out that they could break a device into payments and let us have them for $10-40 a month, if we agreed to pay for them for the next 24 months? Wait, isn’t that the same deal we used to get on those two year contracts, but worse?
The big carriers are stepping up their games in the wake of the $1000 phones hitting the marketplace and you, the consumer, will pay for it all the way to the bank. While we found this latest deal at T-Mobile, all four of the major carriers are using the new slogan of “bill credits” to drop the price of devices, and ultimately their service, to make it look cheaper than it used to be. In reality, all they are doing is offering people a 24 month commitment in order to get that cheaper phone, just like the old days. While it may look great on the surface, here’s the ugly truth about bill credits and how they are not the way to purchase a new phone, especially if you have to give anything up to get them.
Taking a look again at the T-Mobile “Galaxy S9 Promo” that we managed to track down online, it’s not a bad looking plan on the surface. Splitting the cost of the devices, you get 2 of the newest Galaxy S9’s for $1440, but get $720 in bill credits spread over 24 months. First think to notice in the terms is that you won’t be seeing that bill credit for 2 months. That means your paying $60 extra in the first two months, before that bill credit kicks in. From there, you will see a $30 reduction in your bill cost (the cost of one of the phones per month) for the next 24 months. So, in essence, you’re now signed on for 26 months of service to get that free phone, not just 24 months.
Then you get to the issue of cancelling service if you want to move carriers or even just take the phones to an MVNO for a better price. T-Mobile currently charges $120 a month for two lines, then $60 for the two phones, minus the $30 credit. Your total bill for two lines and two S9’s would be about $150 a month. If you try the service for, say 3 months, and decide you want to leave for greener pastures, you’ll be shelling out $1400 for those two phones or going to collections, your choice. Now for the even uglier part… If you leave, you have to pay off the phones before you can sell them or you will risk the IMEI numbers being blocked and unable to be activated. It’s a dangerous area to be in, so you need to plan on paying them off if you are going to leave or change services.
Instead of falling back into those 2 year contract deals, decide what you really want, a better deal or the latest and greatest. For example, you can snag the latest Motorola devices for about 1/3 the price of the S9 and it will serve you very well at a fraction of the price. In fact, you can move to the Purple-Side of the Magenta network for just $80 for those two lines of unlimited everything and spend right around $200 on a stellar Moto offering to keep your costs down to a minimum. You can even take advantage of the MetroPCS iPhone SE port-in special (while supplies last) and get an even better deal on a quality handset. That pins the 2 year cost of the T-Mobile deal at $3660 vs. the Metro side coming in at almost half of that at $1920. While an iPhone SE is nothing special and it is most certainly not in the same class as the Galaxy S9, the fact that you can cut that bill in half for the exact same service that you get from T-Mobile, it makes far more sense for the budget
Once again, you’ll need to make the call on what’s most important to you, a better phone or a lower bill. When we look at the actual costs of these ‘bonus’ deals or anything the requires a “trade” to get the credit, it’s a no brainer to hang back and take a long hard look at the numbers before the deal is signed. Even recently, we found ourselves sneakily sucked in to the Verizon Galaxy S9 deal, even though it’s almost identical to the T-Mobile offering. The different factor with the Verizon deal is that even though T-Mo has expanded their network coverage exponentially over the past few years, Verizon still has a stronger backbone in rural areas and seems to have consistent service from block to block. You never hear about people leaving Verizon due to bad service, it’s usually the higher price, but that’s leveled out and is almost a draw, so keep your eyes on the fine print and make sure the deal is really a deal before you check that box and sign away.
Otherwise, hit up your local MVNO store and see what deals they have to actually cut that bill instead of getting the latest phone. Use that extra $1500 to take a nice vacation – or buy a new phone in a few months. Cash is always better than bill credits.