Planning A Phone Upgrade? 3 Considerations When Upgrading To A Smart Phone

Planning A Phone Upgrade? 3 Considerations When Upgrading To A Smart Phone

Even those of us who are perfectly happy with our current "dumb" phones have to admit it: The convenience of having your schedule, all your contacts, handy apps and, of course, the internet in your purse is hard to pass up. But the smarter your phone, the more complicated the bill—there are a few hidden fees that only apply to the "nice" phones. So before you go trading in your trusty slider for an iPhone or Droid, here's what you need to know.

1. Data Plan

With your old phone, you might have just paid an extra $5, maybe $10 a month for basic data usage, which is often capped at about 20 or 30 MB/month and includes unlimited texting. But that's won't cut it with your new smart phone. Each carrier bills for data differently (and prices vary by location). Verizon charges $30 for unlimited data on top of your voice plan; Sprint plans are sold in "data packages" that include voice and start at $70 per month. AT&T, the iPhone carrier, changed their data plans and eliminated the unlimited data option—$15 gets you 200 MB of data, which they claim is sufficient for most users—or you can pay an extra $10 and get 20 times as much data usage (2 GB). Every gig you use after will cost an extra $10.

2. Insurance

According to Sprint, one out of three people will lose or damage their phones. So be honest with yourself: Are you likely to be in that statistic? If the answer's yes, it makes sense to purchase a damage protection plan for your phone. Some companies charge extra for smart phones, the basis being that it's a more expensive phone to replace, and the fact that they're more likely to be stolen. Verizon charges $8 per month for smart phone insurance—there's an $89 deductible—while regular models cost $6 per month with a $40 deductible. Sprint, on the other hand, will charge you $4 or $7 per month, with the variable being the type of coverage you want. Your phone model does, however, determine your deductible—smart phones will set you back $100; the rest, $50. Some phones just aren't insured by the carriers. Up until recently, AT&T wouldn't insure the iPhone (and now, at $12 per month and a $200 deductible, it might not even be worth it). Be sure to check into your specific carrier and phone model before pressing "purchase."

3. 4G Networks

As our phones get smarter, we want them to get faster, too. Enter 4G networks, which transmit more data at faster speeds than 3G (the most common) networks. Sprint is currently the only carrier offering 4G service, and it's important to keep in mind that 4G isn't in all cities. The devices that can take advantage of the network are limited, and you should know that using the 4G network is going to cost you an extra $10 per month. Sprint claims that the extra fee is because all of the phones' "rich features" mean you're going to use more data than the average user, so the key here is to evaluate whether you'd actually use these special services. The average user won't be able to tell a big difference between networks in in their daily activities like emailing and text messaging, so it's up to you if you want to spend an extra $120 per year.


Follow LearnVest On Twitter! @LearnVest


Financial planning made simple.

Get your free financial assessment.

Related Tags

Get the latest in your inbox.

Subscription failed!

You're Now Subscribed!