The Apple iPhone 14 Pro unveiled Wednesday can run well over $1,000, but it might cost some buyers almost nothing to upgrade, given many trade-in offers and subsidies from wireless carriers.
These deals often come with a catch, of course, such as multiyear commitments to stay with a carrier (with penalties for quitting early) or a higher-priced data plan that can cost you hundreds of dollars more a year, per line.
All of this makes it tough to calculate the actual long-term costs of upgrading to a new phone. When looking for ways to save on a new phone, it is important to focus on how to manage your wireless bill and the cumulative cost of these offers.
In general, the cost of your monthly service plan consumes more of your budget than the expense of a new phone, said Ted Rossman, a consumer-spending analyst at Bankrate.com.
The average phone bill in the U.S. is $151 a month, according to J.D. Power.
If you currently own an iPhone 12 Pro and want to upgrade to the $999 model iPhone 14 Pro, Apple offers $430 for the trade in, bringing your cost to $569. If you traded in the same phone to AT&T, the carrier will credit you up to $1,000 of the cost of the new phone, so long as you agree to a three-year (THREE YEARS!) commitment to one of its unlimited-data plans.
T-Mobile offers a similar deal, a credit of up to $1,000 toward the purchase of a new phone with a two-year commitment on its premium plan. Verizon customers can get up to $800 off a new iPhone 14 and access to a bundle of services with some trade-ins and some unlimited plans, with a three-year commitment.
You are also on the hook for sales tax and other fees.
Since there is little haggling over the price of an iPhone itself, the best strategy to keep costs in check is to find ways to reduce your monthly wireless bill.
Check if you’re eligible for discounts through your employer, professional associations, military, senior discounts or status as a student.
Last year, Rorik Larson wished to add his 13-year-old son to his phone plan. At the time, his individual plan cost about $89 a month with his military veteran discount. He shopped around and switched to T-Mobile, which gave the then-57-year-old a senior discount, ultimately trimming his bill to $35 per line. He added a parental-control app for $10 a month and the purchase plan for his son’s starter phone. He now pays $91.75 a month for himself and his son.
Cell carriers don't care if your family for a family plan. They don't check your ID.
You can add people to your family plan. They can pay you for their part by sending money via Paypal or other services.
The drawback to this idea: You need to trust the people on your plan or you could get stuck with the entire bill.
If you have a data limit, it is often shared, so one person’s heavy usage could leave others with less available data and/or responsible for overage fees.
When I worked for cell customer service, many customers called in after they found out the kids cracked the data cap and had 1GB of additional data at a $10 cost. Even downloading games and charging the bill made for some challenging conversations with the family.
While a share plan can be a good way to save money, things can get messy if a friendship or romantic relationship breaks off. Some people want more privacy too and wouldn’t want others to see their call or text logs.
There are so many ways to save on your bill. Here's my recommendations:
1) NEVER buy a phone and pay it off on a contract bill!
A $1,000 phone will only cost $42 a month on top of your billing charges but you're stuck with it and usually can't upgrade until it's paid off.
With the way Government, the economy and Inflation doing their things it can affect your budget. (Remember 2020-2021 with COVID?) Many people got laid off or deemed non-essential.
If you switch carriers or can't pay the carrier will accelerate your bill with the total amount due on the phone!
Buy your phone outright. Cash is good but even a credit card is better. Your payment is on your card NOT your cell bill. This will keep your options open for better deals or if you need to change carriers.
Take advantage of card programs. (0% interest for 12-24 months. Flight miles, cash back, points, etc). It's your phone!
2) INSURE YOUR PHONE
Many people don't insure their phones.
Back in the day we had landline phones so we could use them for calls to avoid the then costly per minute charges just for a phone call.
Today, many consumers only have a cell phone as their sole means for communicating. Landlines are dying out and many companies are pulling up the copper lines to keep them from coming back.
If your phone becomes lost, stolen or damaged insurance will take care of it. There will be a deductible but it will be lower to repair or replace it versus out of pocket.
Which you want to pay: $249 to replace a dead or stolen phone with insurance or $799 for a new one without?
Oh and those wireless phone deals mentioned above? Don't expect to get them if your phone has a cracked screen, bent frame, damaged charging port (warranty doesn't even cover the port!) or just dead!
3) STAY ONE STEP BEHIND
There is no rule that you have to have the latest phone.
Wait until the next one comes out and people will want to trade in their phones. Check eBay and other sites for used phones. Many companies have overstock of new phones and sell to third parties. You can get the phone you want with a warranty for less and many are unlocked!
Make sure you get a receipt! You'll also have up to 30 days to get it insured.
4) DON'T DO AUTOPAY
Yes they will gave you a discount on your bill but it becomes moot when you forgot a debit that will hit your account and the autopay one took out juuuuust enough for you to get an overdraft charge!
Set a reminder a few days ahead and pay it then. That way you can keep on top of any surprise charges.
5) USE A PREPAID CARD
This is another reason NOT to use autopay!
You can get prepaid cards for many of the carriers. You'll find them with other gift card in many stores. You can also purchase them online.
AT&T wants to give me $25 off every month on the top plan if I do autopay. If I get my prepaid card from Kroger, I get gas points and $1 off per gallon of gas. With the size of my gas tank I would save $17 a month on one tank of gas or $204 a year! Yes the autopay from AT&T saves a bit more but gas prices vary and of this writing we're trying to save as much as we can.
You get $1 off for every 1000 points from just buying groceries as well. Cards normally give you 2x points (ie $25 equals 50 gas points). Look for specials on gift cards for graduation and holidays. Kroger gives out 4X points during these.
$100 of groceries becomes 400 gas points. Your $45 phone card just became 180 points. Buying other prepaid cards for streaming can also get you to save $1 off a gallon of gas as well. All of these will stretch your dollars and savings in your tank!
6) AVOID 5G PLANS (FOR NOW)
Back in the days of 3G and 4G, many carriers wouldn't let customers tether (Today it's called mobile hotspot) due to data restrictions. You had to pay $14 a month at T-Mobile just for data and it was mandatory if you got a smartphone (Also mandatory was the separate Blackberry data plan to use their servers to encrypt your mail!)
Some 5G plans are not only expensive but if you don't get one you don't have 5G only 4G. The hotspot used the same data bucket as data. Some plans (I'm looking at you AT&T) separate the hotspot and data!
Like the old plans, customers complained and the plans were made better and affordable. This will eventually happen to 5G. So if you can live without 5G for the meantime: WAIT!
And finally:
7) GO PREPAID NOT CONTRACT!
Contract plans ARE NOT your friend.
Have a look at your bill (Go ahead and pull it up...I'll Wait)
See all those charges? Local tax, state tax, Universal Service Fee (USF), 911 Equalization fees...
The list goes on and on.
Many look tiny and harmless but as of this writing, the average contract bill can have up to TWENTY-FIVE PERCENT IN TAXES AND FEES! Think of your cell bill with a plan and bolt-ons plus an extra $25 a month that you sent to somebody else!
Today's prepaid bill is simpler: Cost of the plan including tax, State tax, and the 911 Fee (recently added in the last 5 years) for the total.
So let's say you have a $40 plan on AT&T. $40 plus $2.40 (6% Texas state tax), and $2 for the 911 fee.
A total of $51.40! Your contract bill would have run around $65 or more with the taxes and fees. And yes every bit you save adds up in the long run!
Prepaid used to be the stepchild of the industry: Talk at 50 cents a minute and no text. Lower talk per minute and extra fees per text and still no data. One plan (I'M LOOKING AT YOU AT&T AND VERIZON!) made you pay $1 per day: Just for the PRIVILEGE of having phone plan to use!
Virgin Mobile changed all that. Sprint didn't do prepaid but let VM become their go-to for Prepaid. Affordable plans with unlimited talk, text and data (Some carriers are also offering Family Plans on prepaid). No additional goofy fees.
Virgin did so well Sprint bought them!
Today, many of the carriers are offering Prepaid plans and many are affordable. Some like FamilyTalk and Consumer Cellular are what we call MVNO's (Mobile Virtual Network Operator). What means is they use the big carriers to run down their towers. You get a great price and with the tower coverage that AT&T, T-Mobile and others give their customers(*).
Want to see all the MVNO carriers available in the U.S? Click here: https://en.wikipedia.org/wiki/List_of_United_States_mobile_virtual_network_operators
Also you can BYOP (Bring Your Own Phone)! Just order a kit from the prepaid carrier and use it to setup your phone (Many also sell kits on Amazon, Walmart and other stores).
The big carriers have two kinds of phones: Contract and Prepaid. Did you know that you can also buy a new contract phone from your carrier and use it as a prepaid? Many stores are commission based so you might get a push back from the commissioned salesperson (Ie, they make more money on a contract plan). If they refuse to sell it to you, contact the carrier's Mothership and order it from them.
Try their website first and if that doesn't work then call them.
Also check out the phone brand websites. Samsung is known to have good deals on new contract phones that you can buy from the web and also do trade in specials.
Some plans have International roaming for a bolt-on fee. Some have Data rollover (AT&T) good for 30 days when you refill your plan on time.
In the old days you couldn't get insurance on a prepaid phone. Many insurance plans are available for prepaid.
Ausrion will cover the phone for lost, stolen or damaged. Others won't cover lost or stolen so read the fine print and do what's best for you. Contract insurance like Asurion would add the monthly fee to your cell bill. With prepaid the companies deduct it from your checking account every month.
Now go get your Cellphone life in order!
(*)subject to main carrier priority.
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