Verizon Wireless (NYSE:VZ) confirmed it will launch a "Device Payment Plan" starting April 21 to help customers finance the purchase of devices that cost more than $350.
The new payment plan comes amid Verizon's decision to no longer allow customers to upgrade their handset at a subsidized price before the end of their 24-month contract. Previously, the carrier allowed some subscribers to upgrade their phones at a subsidized price after 20 months.
"Customers also have the option of purchasing a phone at full price at any point before their contract expires and beginning April 21, some devices will be available for purchase through the Verizon Wireless Device Payment Plan," Verizon wrote in a post in which it explained the changes to its upgrade policy.
Verizon's financing plan would let customers upgrade and pay for devices without having to sign up for a new contract or pay the full cost up-front. However, the payment plan will not reduce a customer's monthly rate plan bill.
"We are, in fact, implementing a device payment plan for smartphones (and tablets and the Galaxy Camera) that cost more than $349.99," Verizon spokeswoman Debi Lewis told FierceWireless.
She said consumers will pay the full retail price of the smartphone or tablet in 12 monthly payments, with the first payment collected at the point of sale. She also said the payment plan includes a $24 finance charge, billed at $2/month included in the plan. Customers can have two open Device Payment Plans.
More and more carriers are experimenting with device payment plans. It is a central part of T-Mobile USA's new "Uncarrier" strategy, in which customers can either buy their smartphone outright for the full cost of the device or they can make a down payment and then pay for the remainder of the cost of the device in monthly installments.
Sprint Nextel's (NYSE:S) prepaid brand Virgin Mobile and regional wireless carrier C Spire Wireless have tested handset financing programs. Both operators used the startup BillFloat to support their pilot programs, which took place in the first quarter. Leap Wireless' (NASDAQ:LEAP) Cricket and MetroPCS (NYSE:PCS) both launched handset financing options late last year.
For more:
- see this Verizon post
- see this Droid Life post
- see this Engadget article
Related Articles:
Verizon tightens handset upgrade policy
Verizon to add $30 upgrade fee for new handsets
AT&T testing new 'Plus' loyalty program
Verizon ends 'New Every Two' upgrade policy
Sprint shortens return period to 14 days, axes Premier program
Sprint tinkers with Premier handset upgrade program