Converting Verizon Contract Phone to Pre-Paid

For months we’ve been trying to discover a way to reduce our mobile/cell phone service without compromising on the quality of service, etc. The issue is that one of us uses 200+ minutes per month minimum, the other maybe 50 at most. We’ve been using a Verizon Family Plan for a while that had a base price of $69.99, plus $9.99 for the extra line, plus all the other charges, surcharges, tax etc. It usually ended up being $95-$100/month because of the 18% combined taxes and surcharges.

We find this amazingly costly for such occasional use. We considered many alternatives and finally found that the best option for us was to keep one of us on a Verizon “post-paid” (ie. contract) plan and the other we moved to a pre-paid service. There’s an immediate savings with pre-paid of not paying the surcharges that are customary with contract plans.

We were about to purchase a new pre-paid phone/service with Verizon, but we were wanted to keep our phone number and our phone. After calling Verizon and putting up with their salesperson’s shenanigans to try to convince us that this was not a good move, we were able to get them to admit it was possible and instruct us what to do.

Here’s what was required to turn a contract plan into a pre-paid plan:

  1. Our contract date end date had already expired. You cannot do this without early termination fees otherwise.
  2. We were told by the rep on the phone that we MUST take the phone to a Verizon Store to do this – not a reseller, etc. but a VZW-branded store. I don’t know if this was just a ploy, or truly required.
  3. We then had to maintain our position with the in-store reps that this was what we wanted to do, and further resist additional efforts to get us to stay on more expensive plans. We chose the “Core” version of the Verizon Impulse plan because it includes unlimited mobile-to-mobile with other vzw users, only costs $.99/day that the phone is used, and $.10/minute for all other minutes. Since we use about 5o minutes a month for this phone, that should be less than $7/mo. since many of the minutes used are mobile-t0-mobile.
  4. The rep then disconnected the existing number and reserved it (requiring a call into some sort of main office), then re-established the phone number as a new pre-paid service.
  5. This required the purchase of airtime credit. One can choose differing amounts. We chose $50 in order to have 90 days to use those minutes.
  6. The whole process took 10-15 minutes and cost nothing outside of the minutes purchased.

Watch out for these gotchas
Tricky numbers: In the above process, we noticed that the Verizon rep on the phone used the most expensive pre-paid options when “doing the numbers” to show us how pre-paid would be more expensive. Therefore, they used the $3.99/day option when comparing cost. Don’t let this fool you – it’s a sales trick. Further, they also don’t consider the true cost of contract plans with the included surcharges and fees. These don’t exist in pre-paid accounts. In our state, contract taxes and fees tend to be about 18%. Pre-paid reduces that down to 6% in PA and is also on the minutes purchased, not on a contract fee, therefore it’s less taxes paid than in a contract unless our pre-paid usage exceeds a contract price (which is very unlikely).

Verizon Impulse Pre-paid plans compared: The in-store rep recommended a “cheaper” plan with no per-day charges, but a per minute cost of $.25 all the time. This might also appear good to those with poor math/observation skills, but that makes the minutes cost 250% more per minute than the other plans all to avoid a $1 charge for using the phone that day. Consider this example: A 20 minute call with $.25/minute/$0 per-day charge would cost $5.00. The cost to make the same call with the $.10/minute/$.99/day plan would cost $2.98 – that’s 40% cheaper!  Unless all your calls tend to be less than 4 minutes or less (breaking even with the $1/day plan), it’s not a good bargain to go with the $.25/minute plan. Consider yourself forewarned!

    Reducing the Cell Phone Bill

    Amount Saved: $445.01/yr

    As posted previously, I had been considering entirely dumping our Verison Wireless service in exchange for prepaid service through Boost Mobile. I spent several hours analyzing the true cost of doing so by evaluating the cost of the new phones (required for using Boost, optional to stay with Verizon), the monthly cost, etc.

    Boost Mobile really looked good at first, but to get a decent phone for each of us would have totaled over $350 dollars, thus reducing the money-saving nature of going this route. The real savings of switching to Boost after buying the phones would have only been about $80.

    With Verizon, we have a family plan with a base cost of $69.99/mo. I spoke with a VZW person who told me that the additional charges on wireless cell phone bills (at least in PA) totaled about 18%. Our true cost was usually around $100/mo. That’s because of an extra $5/mo. text messaging package that was added, etc. Our plan included free calling to any other VZW user. This cannot be discounted when choosing another service. It also included free nights and weekend calling – as most do.

    We considered dumping local and long distance, then upgrading our plans so that we could eliminate some bills, but after we found Ooma that turned out to be a money-losing proposition.

    Finally, we decided to keep one phone on a minimum verizon plan ($39.99/mo.) and sign the other one up for Boost Mobile and use per minute pricing ($.10/minute). Because one if us uses about 100-130 minute per month, this ends up being $10-13/mo total – no taxes or surcharges. Further, we found a refurbished Boost Mobile phone on ebay for $34.99 incl. free shipping.

    By going this route, we’re dropping our cell phone cost $480/yr with a 2-yr savings of $925.

    The take home lesson here is this:

    1. Evaluate your cell phone usage
    2. If someone in your family (if on a family plan) uses barely any minutes, then consider placing them on a pre-paid account
    3. By doing the math, you can likely find a way to save several hundred dollars per year.
    4. If you like to use your cell phone for your long distance calling while at home, consider getting an Ooma. You’ll save more that way if combined with the above approach.

    Have you found a way to lower your cell phone cost? Please share with us by posting a comment.

    Ideas for Lowering the Cell Phone Bill

    We’ve been a long-time verizon wireless customer. While we like their service, we as Americans pay way more for our wireless service than much of the world. This really bugs our family! We’ve always been a 2 -year contract family for VZW and on average, our mobile bill is about $100/mo (that’s $1200/yr for all you peeps who struggle with math).

    We’ve known people who used TracPhones, and pre-paid service for cell phones and have heard that they’ve managed to also have cellular service for far less monthly and yearly cost. At the moment, we’re considering dumping our contract plan and going with something like Trac Phone or pre-paid from Verizon.

    We called today to see when my contract expired – 3/2011! That means, if we cancel, we’d have to pay $170 per phone (we have two lines on our plan) – $340 just to get out of the arrangement. We looked online for some ways to get out of the contract, but most of them seem unethical – not something we want to do.

    So we explained to the customer service rep at Verizon why we wanted to know our contract end date – so we could lower our expenses. She was sympathetic and tried to offer alternatives. Unfortunately, we already had the cheapest plan, so there was no lowering the plan cost. We did decide to remove the text messaging package saving $60/yr.

    Turns out though, that about three weeks ago, they had called and offered to move us to a different, newer plan for no extra fees. It included some extras, etc. By agreeing, we renewed our contract and that’s why it wasn’t up for renewal for 2 years. The CSR informed us that we could still go back to our old plan which had en ending date of August of this year.

    So, we should only have to pay $170, minus $5/month that we’ve had the contract open, so more like $50 if we cancel. Considering that’s only half of one month’s phone bill, that’s acceptable. Most likely, we’ll wait til August then dump the whole thing in favor of pre-paid.

    At the same time, we did signup for CellTradeUSA which provides a service of matching up people who want to get out of contracts with those who want to get into contracts (but don’t want to pay the setup fees, etc.). This way, we can have the financially responsible party changed to someone else thereby having them assume the remainder of the contract. This might end up working which would also get us free and clear.

    Anyone else have experience doing the above? How have you lowered your cell phone expenses?