Verizon Kills Early Upgrade Plan For iPhone 6 And Other Smartphones

A large percentage of cell phones in the United States are sold with a subsidy, which means customers pay a lower price -- often $200 -- in exchange for agreeing to a two-year contract for cellular service.

In 2013, Verizon started to wean its customers off subsidized devices with its Edge upgrade plan. Instead of buying a discounted phone, customers paid the phone off over 24 installments. The carrot to get people to sign up was that Edge allowed consumers who wanted the latest and greatest devices to upgrade after six months and paying off half the price -- simply turn in your old phone and start the installment plan for a new one.

On Tuesday, Verizon effectively ended its early upgrade program. It's still called Edge, but starting at the end of the month, if you're paying your phone off in installments, you'll need to pay for it in full before Verizon will let you upgrade to a new one.

Customers who are already on Edge plans or who sign up before May 31 will get grandfathered into Verizon's most recent policy, in which customers can upgrade after paying off 75 percent of a device's cost.

"The purpose of the new upgrade terms was simplification of the purchasing process," Verizon spokesman David Samberg wrote in an email.

The new policy might not be as bad for subscribers as it seems. Once you've paid off your entire device, you get to keep it, and old cell phones can retain some value. Verizon will offer up to $90 for a two-year-old iPhone 5, for instance. Plus, if you absolutely need to upgrade your phone, Verizon will let you pay off your phone at any time without paying a fee.

T-Mobile and AT&T offered early upgrades before Verizon. T-Mobile's Jump upgrade plan still lets customers turn in the device they're currently paying off when they want to get a new phone. AT&T's Next plan lets customers choose whether they plan to upgrade in 12 or 18 months. Sprint's plan allows users to pay an extra $10 a month in order to upgrade after one year.

But if Verizon's move to end early upgrades succeeds, expect other big carriers to follow. And that means that Americans will increasingly have to confront that the phones they covet can come with a $650 price tag -- either to be paid now or some time down the line.