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Verizon adopts 36-month payment plans — what it means for you

Verizon 36-month installment plans
(Image credit: David Paul Morris/Bloomberg via Getty Images)

Buy a phone from Verizon these days, and you could be tying yourself to the wireless carrier longer than you previously expected. Verizon has rejiggered the length of its installment plans, dropping 24- and 30-month options in favor of a single 36-month time period.

The move leaves you with two choices when you buy a phone at Verizon — either pay the full amount from the outset to own the phone outright, or pay it off, interest-free, over the course of three years. Of course, during that time, you'll also be paying for your smartphone service via one of Verizon's phone plans.

The switch to Verizon's payment program first surfaced in a report from Droid Life last week. Verizon confirmed the move to us via email.

"Verizon's 36-month device payment plan makes it easier than ever for customers to get their hands on the latest and greatest smartphones and tablets with 0% APR," a spokesperson said.

While the move away from 24-month payment plans marks a change of course for Verizon, it's not out of line with some of Verizon's rivals among the best phone carriers. AT&T only offers a 36-month payment option when you buy your phone in installments. In 2018, T-Mobile experimented with 36-month payment plans on devices like the Galaxy S9 and LG G7 ThinQ, though these days, the Uncarrier continues to offer 24-month options for most of its phones.

With the Samsung Galaxy S22 lineup debuting later this week, payment options at the major wireless carriers are more relevant than ever. Here's the current state of affairs, along with a look at the pros and cons of longer payment plans.

What does it mean to buy a phone in installments?

Buying a phone in installments is exactly what it sounds like — you take the cost of the phone and split it up into individual monthly payments. Carriers usually tack on those payments to your monthly cell phone bill, so that you're paying everything all at once. 

Installment plans became popular after the end of the era of subsidized phones — that was back when phone carriers assumed some of the cost of the phone in exchange for you agreeing to multiyear contracts for wireless service. Once subsidized phones went away, the cost of devices for consumers jumped up dramatically; installment plans became a way to spread out some of those costs.

Phone carriers typically don't charge interest on their payment plans, so you're not paying extra to pay off the phone over time. Instead, you're just extending your time as a subscriber to the phone carrier. That's a trade-off that suits phone carriers just fine.

What are the installment plan options at the major carriers?

Following Verizon's switch to 36-month installment plans, here's what's available at the three major carriers if you don't buy your phone in one fell swoop.

  • AT&T: 36-month payment plan
  • T-Mobile: 24-month payment plan
  • Verizon: 36-month payment plan

What's the advantage of a 36-month payment plan over a 24- or 30-month option?

The most immediate benefit to a longer payment plan is that the size of your monthly device payment goes down, since you're spreading out payments over a longer period. You're still paying the same amount, but in smaller increments, which can be helpful in an era of tighter monthly budgets.

Consider the iPhone 13 Pro Max, which starts at $1,099. That's a big number to pay in one lump sum. But opt for T-Mobile's 24-month installment plan, and the the iPhone 13 Pro Max can be yours for 24 payments of $45.84. At Verizon, you're now making 12 additional payments, but that means the monthly cost drops to $30.55. Again, the T-Mobile and Verizon customer will pay the same amount over the lifetime of their installment plan, but the T-Mobile customer will be done with payments more quickly, while the Verizon subscriber will get to budget for a smaller payment each month.

What are the disadvantages of a 36-month payment plan?

The longer your payment plan runs for, the longer your commitment to a specific carrier. Thus, someone paying off a device over 36 months isn't going to be able to switch carriers until that three-year-period is done. The only way to get out of your commitment is to pay off the remaining balance of your phone in full. (Sometimes, when you switcher carriers, your new wireless provider will help you do just that, in the form of gift cards designed to help pay off your device.)

Because most carriers make installment plans a condition of any phone deal they have, you've got to commit to the carrier for those 24 to 36 months to reap the savings of any deal. For instance, one of the best Verizon phone deals right now lets you get a second iPhone 13 for free after your buy one model. However, that second iPhone is only free because Verizon is giving you monthly bill credits to cover the cost of that device, and those bill credits are spread out over 36 months. Leave Verizon before then, and you're on the hook for the remaining cost of your free phone.

Payment plan outlooks

Payment plans are a popular way for smartphone shoppers to take on pricier flagships or to get new phones at a sizable discount. But they also require a longer commitment to a particular phone carrier. With carriers looking for ways to minimize customer turnover, it only makes sense that an installment plan that locks in a customer for three years instead of two is going to become the preferred option at most carriers.

Philip Michaels is a Managing Editor at Tom's Guide. He's been covering personal technology since 1999 and was in the building when Steve Jobs showed off the iPhone for the first time. He's been evaluating smartphones since that first iPhone debuted in 2007, and he's been following phone carriers and smartphone plans since 2015. He has strong opinions about Apple, the Oakland Athletics, old movies and proper butchery techniques. Follow him at @PhilipMichaels.