Verizon Switches to Mandatory Three-Year Contracts for Most Connected Devices

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As of February 9th, Verizon customers are now limited to two payment options when switching to a new device. You can pay for your new device outright or commit to a three-year payment plan. This arrangement should work fine if you have unwavering faith in your phone’s software update policy. Or maybe you have the cash on hand to purchase an iPhone 13 outright. But it’s probably a good idea to double-check the terms of your current or upcoming Verizon contract regardless.
Other major wireless carriers such as AT&T have recently flirted with the concept of shelving flexible payments and 12- to 24-month plans in favor of a leaner, stricter 36-month contract. But Verizon is the first to enact this controversial new business model. The ever-rising price of smartphones certainly incentivizes keeping a phone around for a few years instead of upgrading with every new release. But let’s face it. It’s impossible to predict the longevity and quality of software support across brands and individual smartphone models.
The new payment program restructuring has been a quiet process. But Verizon has clearly doubled down on its position since the new policy went live. Once you’re locked into a 36-month contract, you technically have the option to pay off your device ahead of time. That’s as long as you have enough cash to cover the entire remaining balance in a single transaction. You can’t trade your phone in for credit until it has been fully paid off and Verizon is not currently advertising early upgrade options.
Under this new payment plan system, you won’t need to pay more for a new device. Verizon’s payment program FAQ page states that there are no hidden interest fees in its three-year contracts. You can pick up one of Verizon’s cheaper phones for as little as $3/month over the course of three years. The new policy applies to nearly  every contract-eligible device Verizon sells.

Alternatives to Verizon’s 36-Month Phone Contract

Verizon has made its position clear. You can pay for your new device upfront or you can slog through three years of modest monthly payments. There are a few workarounds worth considering if those terms aren’t going to work for you. But it’s safe to say that flexible financing options and short-term payment plans are out of the question until Verizon says otherwise. Be sure to compare any new contracts against your current (or upcoming) Verizon agreement. Don’t walk from one raw deal into an even worse one.
In the meantime, here are a few alternatives worth considering:

1. Buy a Verizon device from a third-party retailer. Verizon may have axed the illusion of choice, but most major retailers are still offering heartier financing options for smartphones and other connected devices. Stores like Best Buy and Amazon are authorized to sell official Verizon products. Many of them provide a selection of Verizon Device Payment plans at checkout. It looks like Verizon’s new 36-month contract rule doesn’t apply (yet).
2. Buy an unlocked or used phone. Want to free yourself from Verizon’s contractual clutches? Consider switching to an unlocked or refurbished device that doesn’t technically belong to Verizon. While you might be on the hook for a larger amount of money up-front (especially if you’re making a direct purchase on a marketplace site), you’re more likely to find a deal this way than through the Verizon store. Plus, you’ll have the freedom to deactivate your device and switch it out as desired.
3. Get a new wireless carrier. This is a dicey nuclear option with the industry trending towards longer contract periods with stricter terms. But it’s still too soon to call. After all, T-Mobile experimented with the 36-month payment structure in 2018 and concluded that everyone would be better off sticking with a variety of shorter plans. There’s always the possibility that competing carriers will pony up exciting deals and customer-friendly financing alternatives to cater to recent ex-Verizon subscribers. Keep an eye out!

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