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How to save money with Verizon's new no-contract plans

How to save money with Verizon's new no-contract plans
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Verizon is completely revamping its payment plans, and now you can save some money. Say goodbye to two-year contracts and smartphone subsidies; if you're a new customer, there's a new tiered system that simplifies things and could save you. But if you do it wrong it might cost you extra.

The previous business model, for Verizon and other carriers, was to lock you into a two-year contract. That meant your cost for a new smartphone was low, because the balance of what the phone is really worth gets paid to the carrier over the course of two years.

Verizon's new system with no subsidies and no contracts mean you'll be buying your smartphone at the full cost upfront, but you paying slightly less per month for your calling, texts and data. There's also a financing option if you don't want to pay $500 or more for a new phone up front.

For existing Verizon customers: If you want to keep your two-year contract plan for the future, you can. However, the new plans basically come out to the same cost, so you aren't going to be saving much.

On the plus side, once you buy the phone, or pay it off through the financing, you own it free and clear. You don't need to feel pressured to spend a chunk of money or extra monthly fees to upgrade it.

You could even buy used Verizon phones online for a fraction of the original price and bring them to your plan. No need to spend a bundle on a new one.

With Verizon's new pricing structure, you pay $20 per smartphone and choose a small, medium, large or extra large data plan. Here's where you have to be careful.

The small plan is $30 a month for one gigabyte of data; medium is $45 for three gigabytes; large is $60 for six gigabytes; and extra large is $80 for 12 gigabytes. BUT if you choose a smaller plan and go over your allotted data, Verizon charges you $15 per gigabyte for the overage.

Overages can jack up your monthly bill quickly, so err on the side of caution when choosing your plan. Be sure you get the free Verizon app on your phone that lets you see how much of your data plan you've used.

If you have multiple people on your plan, make sure they only do their video watching, music listening and app updating while using Wi-Fi. This keeps them from burning through the data plan too fast.

To ensure you've got the latest information on everything tech, check back often to our Happening Now page.

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Source: Re/code
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