Verizon’s device payment program makes it easy to upgrade and experience the 4G LTE network
UPDATE: Verizon Edge is now called the Verizon device payment program. Keep reading to learn how you can upgrade to a new device when you want with this program.
“Tick, tick, tick, tick…”
If you’ve ever had a cell phone contract, you’re familiar with that sound.
It’s the sound you would hear in your head as you counted down the agonizing seconds, minutes, days and months waiting for your old contract to end so you could upgrade to a new phone.
And, chances are, it would sometimes seem like you had to wait forever to become eligible to buy your new device while friends, family and co-workers walked around showing off the latest new smartphone.
Thankfully, multi-year cell phone contracts are mostly relics of the past. Today, you can upgrade to a new device in 24 months or less with Verizon’s device payment program.
How do device payments work?
When you purchase a device with a Verizon device payment agreement, the retail price is divided into equal monthly installments that you pay off over time rather than paying for it all up front.
Unlike cell phone contracts of the past, there is no service contract. So with the device payment program you can get a new device as soon as your device is paid off.
To become eligible to buy a new device, all you need to do is pay off the remaining balance of your old device. Then, pick out your new device and pay the one-time $30 upgrade fee at activation.
The device payment program is open to customers whose accounts are in financial good standing.
How many monthly payments before my device is paid off and I can get a new phone?
Monthly device payments are available for postpaid smartphones, basic phones, tablets, certain smart watches and the latest devices such as the Samsung Galaxy S9.
- For smartphones, basic phones, tablets or Humx, device payment agreements are 24 months.
- For certain eligible connected devices (some smart watches, for example) the device payment agreement is only 6 months.
How much is a typical monthly device payment?
Monthly device payments offer customers access to the latest technology on the nation’s largest and most reliable 4G LTE network. For example, the Samsung Galaxy S9 with an Infinity Display and 4K UHD video capture ($799.99 full retail) is only $33.33 a month. The LG K20 V ($168 full retail) is only $7 a month.
What are some other benefits of the device payment program?
Besides the ability to upgrade at any time once the device is paid off, monthly device payments give you the following benefits compared to an old-fashioned service contract:
- You’re not locked into a two-year service contract
- There are no early termination fees or finance charges
- You have the flexibility to pay off the remaining balance of your device anytime you want
And once the old device is yours, you can do with it as you choose, whether you want to recycle your old device for an account credit or give it to a friend or family member to activate.
Watch a short video about how device payments work
Read the device payment FAQs
It didn't take long for Verizon Wireless to jump into the early upgrade game.
A little more than a week after T-Mobile unveiled its Jump program and two days after AT&T debuted Next, Verizon on Thursday announced Edge, its own no-contract plan that enables customer to upgrade to a new phone after only six months.
Verizon Chief Financial Officer Fran Shammo confirmed the Edge program on an investor conference call earlier Thursday before the carrier released the full details.
While Verizon maintains that Edge evolved out of a series of plan changes it made over the last few months, the timing of the various announcements may give pause to a more skeptical observer. The close proximity of the new plans, which T-Mobile touched off with its splashy event last week, underscores the competitive environment amid a period where the carriers are starting to see slowing customers growth.
Verizon, however, managed to show continued momentum in the wireless business, adding 1 million net new customer connections in the second quarter amid a gain in profit.
Verizon Edge looks similar to AT&T Next, but with a few key differences. The plan allows customers to go on a "no-contract plan" where they pay for the full price of a phone over 24 monthly installments. But after six months, customers are able to upgrade to a new device -- as long as they pay for half of the cost of their previous device and turn in their device.
So after six months, a customer would have only paid off a quarter of the price of the device. Another quarter is owed if the customer opts to upgrade after six months. Given the price, the more cost-effective option would be to upgrade after 12 monthly payments.
"The device payment plan is an absolute win for customers who want the latest technology," said Ken Dixon, head of marketing for Verizon, in an interview with CNET.
The plan, which will go into effect on August 25, has no upfront costs, although the first month's payment is made immediately, and there are no program, early termination or upgrade fees, Dixon noted. The plan includes all basic phones and smartphones.
But like the AT&T program, customers are still stuck with the typical Verizon service plans, which are pricey and structured to earn back a return on the smartphone it subsidized for a contract customer.
Critics have called out the plan for being even more expensive for consumers. Rival T-Mobile dinged AT&T's plan, noting that customers essentially "pay twice for their phone." Verizon's plan is structured the same way. When T-Mobile moved to a no-contract model, it slashed the price of its plans to reflect the end of the subsidy-based pricing structure.
Shammo, in an interview with Reuters, nixed the idea that Verizon would cut its service plans to match the new no-contract structure.
Dixon defended Edge, saying that it represents one option for customers who insist on upgrading their devices early. He noted that customers can opt for the traditional two-year contract structure, in which they would be eligible to upgrade to a new phone at a subsidized price every 24 months.
When factoring the broad 4G LTE roll out, Dixon argued that Edge is an attractive offer.
"At the end of the day, we deliver a better value in the marketplace," he said.
He also argued Edge is an evolution of a few moves made over the last few months. In October, Verizon introduced a device payment plan for tablets. In April, Verizon introduced an installment plan for smartphones, splitting up the cost of the device over 12 monthly payments.
"This is something we've been doing," he said.
The plan is eligible to new customers or existing subscribers who are eligible for upgrades. Customers on grandfathered unlimited data plans are out of luck; only customers on a capped plan or the Share Everything plan can sign up for the service.
Correction at 10:10 a.m PT: One reference to AT&T's early upgrade program has been fixed. It is called AT&T Next.
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Verizon today matched AT&T and T-Mobile with a new program called Edge that lets customers get new phones faster by paying an additional monthly fee. Under Verizon's plan, the full retail cost of a phone is divided into 24 monthly installments, and you can upgrade every six months if you pay 50 percent of the device's full retail cost. On paper that compares favorably to AT&T's Next and T-Mobile's Jump programs: Next splits the retail cost into 20 monthly installments and allows an upgrade only every 12 months, while Jump allows upgrades every six months but requires a down payment and additional monthly device payments.
But scratch past that surface layer and the Edge plan is just the same shell game as AT&T Next, designed to sucker customers into paying both the device subsidy built into Verizon's already high monthly fees and the full retail price of their phones. (Like AT&T, Verizon discloses that the subsidy exists in its SEC filings, but declined to divulge the exact amount when I asked.)
So here's the math for the $650 Galaxy S4, based on widely held industry estimates of a $20 / month subsidy built into Verizon's standard plans. Under Edge, you'll pay $27 a month for a new GS4 on top of whatever plan you already have. That means at six months, Verizon will have collected $282 towards the price of that phone: $162 in Edge payments, and $120 in subsidies from your plan. But Verizon doesn't count the subsidy towards the retail cost of the phone, so if you want to upgrade at six months, you'll have to pay another $163, since you can only upgrade when 50 percent of the phone is paid off. That means Verizon will collect a total of $445 towards a $650 phone if you trade in that GS4 after six months, and it'll get to resell that phone and start the cycle all over again.
The math tilts even more favorably in Verizon's favor if you don't trade in your phone every six months. At 12 months, Verizon will have collected $565 towards that $650 phone: $325 in Edge payments and $240 in plan subsidies — and you still have to trade in the phone. By month 18, Verizon has collected $846: $486 in Edge payments, and $360 in device subsidies. That's $196 in pure profit — money that would have otherwise gone to subsidize the cost of the phone.
If you want to get really mad, just keep the math going to 24 months, at which point you'll have paid $650 in Edge payments for the phone and Verizon will have collected $480 of device subsidies built into your plan. Compare that to Verizon's standard two year contract, which would have cost you just $199 up-front and then nothing additional monthly: the built-in plan subsidy would have paid off the phone in the background, and you would simply walk away with the phone in hand. It is the clearest proof that Edge is designed to keep Verizon's prices high while making you pay for phones more directly.
In the end, what AT&T and Verizon are doing is simple: the cost of device subsidies eats into their bottom line, and they're taking advantage of consumer desire for new phones faster as a way to keep their plan prices high while directly passing on the full retail cost of the phone to customers. This is bad — you can argue about the specific details and which plans might be better at each point in the road, but the final result is that instead of competing to provide better service at lower prices, the two major carriers in America are competing to find innovative ways of maintaining their historically inflated prices while boosting their revenue and providing substantially less value to their customers.
In fact, the simplest way to understand all these new plans is simply to ask whether you need an accountant or an engineer to explain the value of anything Verizon or AT&T do. If it's an accountant, you're getting screwed.
Read more: AT&T's Next phone upgrade plans are a huge ripoff
Verizon Edge Device Payment and Early Upgrade Plan
Technology changes fast. You purchase a smartphone and within a few short months, something new hits the shelves.
If you want to stay on top of the latest technology, Verizon Edge offers an easy way to upgrade to the newest smartphone. Verizon Edge is a flexible equipment payment plan that spreads the retail price of a phone over 24 months. You can also upgrade to a new smartphone in as little as 30 days if 75 percent of the full retail price of the smartphone has been paid.
Here’s how it works: Choose the phone you want and sign up for a service plan. The full retail price of the smartphone will be divided over 24 months. After a minimum of 30 days and payment of 75 percent of the phone, you can Edge Up to a new smartphone. It’s as easy as that.
There are no finance charges or upgrade fees with Verizon Edge. You can save up to $25 on monthly line access per Verizon Edge smartphone on The MORE Everything Plan, depending on the data allowance chosen, and you can opt to put the first payment on your bill instead of paying at the time of purchase. Terms for Edge customers who enrolled prior to June 1 will not change until they pay their remaining balance or Edge Up to a new device.
NOTE: Verizon Edge was originally announced on July 18, 2013. As updates to the plan are made, this article is updated to reflect the current terms and conditions.
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What's the Difference Between Verizon EDGE and a 2-Year Contract?
When getting a new phone on Verizon, you have two options: you can either activate it on a two-year contract or you can activate it on Verizon's EDGE program. In the near future, Verizon will transition out of two-year contracts and move exclusively to the EDGE plan. For the time being, let's take a look at the difference between the two options so you can figure out what's best for you.
How it Works
The two-year contract model is how cell phones in America have been for awhile. With a two-year contract, you purchase your new phone from Verizon at a heavily discounted price and, in two years, you are able to purchase another phone at a discounted price. During the two-year period, you cannot terminate your Verizon service or the specific line from service without facing an early termination fee (ETF). However, the two-year contract does not lock you into a specific service plan type. For example, you can change the data allowance on your plan whenever you want without facing any fees or paying an ETF. The two-year contract only applies to the phone being upgraded.
The Subsidized Phone
As previously mentioned, on a two-year contract you purchase the phone at a large discount. For example, you can upgrade to a 16GB iPhone 6 on a two-year contract and pay $199 for the phone. However, that specific iPhone actually costs $649. Verizon provides a huge subsidy on the phone hardware since you are signing a two-year contract. Since you are purchasing the phone outright, you own the phone during and after the two-year period.
The two year contract comes with more fees than phones on the EDGE program. One fee is the upgrade/activation fee. Whether you are upgrading or adding a new line on a Verizon two-year contract, you pay a $40 per line upgrade/activation fee that shows up in your next bill. Almost all Verizon customers, with the exception being larger business accounts, pay this fee.
The other fee relevant to a two-year contract is the ETF. On Verizon, the ETF on a two-year contract for a smartphone is $350 when you first purchase your phone and sign the contract. This $350 ETF on “advanced devices” (smartphones) stays for the first seven months of the contract. From months 8-18, the ETF declines by $10 per month. From months 19-23, it declines by $20 per month. In the final month of your contract, the ETF reduces by $60.
How it Works
The Verizon EDGE service has been around for almost two years now and is the program that Verizon will be exclusively moving to in the near future. On Verizon EDGE, you get your phone for free and pay off the device's full retail price over 24 months. You are not locked into a contract and avoid many of the fees associated with the two-year contract. Verizon also gives you a discount on your monthly service for each line on EDGE.
Owning vs. Financing
On Verizon EDGE, you pay the sales tax on the phone when you first get the device and then finance the retail sales price over 24 monthly payments. This means at the end of two years, your phone is completely paid off. You do have the option of paying a down payment on the device when you first purchase it. This will lower your monthly payment. At any time during the 24 months, you can pay off the balance owed on your phone and own it. You can even make a down payment equal to the full price of the phone when you first get it in order to avoid a monthly EDGE payment. On EDGE in order to upgrade to a new phone, you must have 100% of the phone paid off. However, you are not locked into a contract. This means you could get a new phone on Verizon EDGE, pay it off in a month and then cancel the service on the line without paying an ETF.
Monthly Line Access Discounts on EDGE
In addition to not paying upgrade fees or ETFs, EDGE customers get a per line discount on their monthly access fees for each phone on the EDGE program. On a two-year contract, the monthly access fee for a smartphone is $40 per line. On EDGE, you get a $15 or $25 discount off this fee per line. The discount depends on the amount of data on your plan. Accounts with 4GB or below receive the $15 per line discount while accounts with 6GB or more data receive the $25 discount.
Basically, if you have 6GB or more data on your Verizon account and plan on keeping your data allowance at or above that level, the EDGE program is more affordable. For customer's with 4GB of data or less, EDGE is slightly more expensive over two years. In both cases, however, customer's benefit from the EDGE program in the sense that they are not locked into a two year contract and can upgrade their phone whenever they want. You also avoid many of the pesky fees associated with activating your phone on a two-year contract.
Now, let's look at a couple numerical examples. The following two scenarios will compare the costs of EDGE vs a two-year contract for a customer's account with two 16GB iPhone 6's. We will look at an example assuming a 2GB data allowance and one assuming a 10GB allowance. Sales tax in this example is set to 9.5%.
2 16GB iPhone 6's with 2GB of Data
2 16GB iPhone 6's with 10GB of Data
Have any questions about the Verizon two-year agreement or EDGE program? Leave a comment below or reach out to us over our web chat!
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