Is your phone plan a rip-off?

Here at Back Market, we’re committed to helping you make greener decisions for the environment, and your wallet.  

When it comes to buying and using smartphones, the majority of Americans on postpaid carrier plans are overpaying and have no idea. So today we’re lifting the lid, and sharing how you can save more than $700 a year. Read on to find out how.

Postpaid and prepaid: What’s the difference?

A postpaid plan is a mobile service plan where you use your service first and pay for it later, typically at the end of a monthly billing cycle. With postpaid plans, you are often offered a “free”  phone as part of your commitment or renewal, paid off in installments over a set period, like 12, 24, or 36 months. These plans average $124 per month.

But what if we told you your carrier has you paying more than you should? Like two times more, that is. 

Let’s compare this with a prepaid mobile plan. Prepaid mobile plans that operate under the same parent company as the big post-paid plans offer the same unlimited data, talk, and text on 5G and 4G LTE networks, but at a lower price. They do this by separating the cost of the service, the device and other excess perks.  

More transparency on what you’re actually paying for can add up to a lot of savings, and bringing your Back Market device to a prepaid plan could even save you hundreds of dollars a year.  

Why that “free” phone is not really free

If you recently received a new “free” phone from your carrier, check your bill again.  There is no free lunch.

Here’s the intel – postpaid phone subsidies are offered by carriers, but come with a catch and a commitment.  With a postpaid phone plan, your device is locked to the carrier. This means you can only use it with their service. Not only that, but they will be charging you for a premium service for the next 36 months as you pay off that device.

With postpaid plans, carriers hide the cost of your phone inside a higher monthly fee, and what you really have is a device payment plan. That bundle may feel more premium, but it’s not the case – make no mistake, you are going to fully pay for that device (and then some). 

Breaking down the costs: How much could you save?

This table shows data from a standard postpaid carrier plan, offering unlimited data for a single user, plus one of those “free” devices. Our example shows a 3-year timeframe to account for the duration of the commitment until you really own your device.

Let's assume you trade in an old phone and get a "free" model in exchange for your trade-in. This service retails at $90 a month. It comes with 5G, some hotspot allowance, and a nice discount on a streaming service. On paper, it’s around $90 a month, and you might get ~$10 off that if you set up autopay. 

But here’s where the sneaky additional fees and extras come in. First, there's a one-time $35 activation fee to set up your plan. Then, there’s sales tax – these differ depending on where you’re located in the US, but it’s usually an average 26.8% tax added on to your cost. All of a sudden, you're paying an extra $260 a year in sales tax. Counting up the average monthly cost, that’s around $103 per month for your phone and service. 

Back Market x Visible by Verizon

Let’s compare that to a prepaid plan offered via Visible by Verizon. We run a partnership with Visible, which lets Back Market customers unlock exclusive savings. With Visible, paying less doesn’t mean lesser quality. It’s all unlimited data, talk and text on Verizon’s 5G & 4G LTE networks. But Visible’s app-based service simplifies the business model and admin involved in your service, which means significant savings for customers like you. 

Say you purchase an iPhone 15 Pro from Back Market in our Premium grade, which means flawless body condition and battery life. You trade in your iPhone 12, and pay for that device with an Affirm payment plan. And for your service, you select Visible’s most popular unlimited plan, coming with: 

• Unlimited data, talk & text on Verizon’s 5G & 4G LTE networks

• High-risk spam and robocalls blocked

• Unlimited use of your phone as a WiFi connection

• Unlimited talk & text to Mexico & Canada

Through our exclusive Back Market offer, all this comes to you for just $20 a month, taxes and fees included.

So let’s tally that together and look at exact figures of how much you could be saving. Using our example where you purchase an iPhone 15 Pro in Premium grade whilst trading in an iPhone 12, that’s a total of $37 a month for your phone and service. That’s 64% less of the $103 you were paying before.

The total savings would tally up to $793 a year, or a massive $2,378 over the next three years. And those savings could buy you three more iPhone 15 Pro devices from Back Market, or another 40 months of your mobile plan with Visible. See, it pays to do the math.

Switch now, and bag yourself some savings

So what’s stopping you from switching? 

You don’t have to take our word for it – get out your bill and view the math for yourself. Check out this comparison tool to see how different plans from major and discount carriers match up, and really lift the lid on how much you could be saving.

If you’re currently on a postpaid plan and want to switch, it’s easier than you think. If you’re on a device payment plan, you have the option to pay off your device in full. We recommend contacting your service provider for specific details, but we’ve listed information from three of the major carriers on how you can complete a device payoff: 

• AT&T 

• T-Mobile 

• Verizon

Once it’s paid off, you’re free – you own that device. Then you can bring your own device to a prepaid plan, or trade-in for a refurbished one from Back Market.

When you sign up for Visible by Verizon, there are no hidden fees, no activation charges, and you don’t require a contract. And with an added discount when you purchase a Verified Refurbished phone from Back Market, you could be paying as little as $20 a month for your service, all while reducing e-waste and helping the planet in the process.