$199 smartphones are a thing of the past

Posted at 7:45 PM, Sep 11, 2015
and last updated 2015-09-11 19:45:15-04

Have you heard the news? Verizon and Sprint are joining T-Mobile in getting rid of two-year phone contracts. Along with that comes the end of the $199 smartphone.

Fall Rush Will be Different

It's a rite of fall: Apple releases a new iPhone, and the smartphone frenzy is on. For $199, millions of people upgrade their phones when the newest model comes out.

But that's about to change.
Most major carriers -- AT&T being the last holdout -- are ditching contracts and subsidized phones.

That means your next phone, if you want the latest model, will cost $600 or more.

What You Can Do

But don't panic. You'll be able to spread out the payments, paying about $25 a month at most carriers.

Verizon's website already has the new iPhone 6 listed at $27 a month, which would then be included in your monthly rate.

An analysis by says over the two year period "your cost will be roughly the same, maybe even a bit less."

Switching Carriers Will Still be Tricky

But from the "doesn't that stink" file: You still won't be able to switch carriers easily.

Want out of your deal in 6 months or a year? You'll have to pay the $650 price of your phone, instantly.

You'll say "doesn't that stink."

The good news is those dreaded early termination fees will finally be a thing of the past. They could hit you for $300 or more if you tried to end a contract before your 2 years were up (in many cases, it was to cover the cost of the phone).

So the bottom line: This change in plans is not a reason to panic, or drop your carrier.

Once you get used to the change, you'll look think two-year contracts are as outdated as a flip phone or mom's old dial phone.

So don't waste your money.