BROKE in Philly

High cost of being broke: Cell phones are crazy expensive

When you can’t pass a credit check, costs add up even faster.

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Illustration by Steve Teare
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This article is part of the High Cost of Being Broke series, produced by Broke in Philly, a collaborative reporting project on economic justice. Click here to see all the #HighCost stories.


To accomplish almost anything in modern society, you need a cell phone.

Exaggeration? Hardly. Sure, people use their phones for frivolous tasks like texting and streaming music — but they also use them to get essential things done. That’s not just conjecture; a 2015 report from the Pew Research Center revealed that in the United States, smartphones in particular have become increasingly vital.

Americans use their phones to access information about their health, conduct online banking, look up government services, enroll in educational programs and search for jobs and housing.

And people who are experiencing economic hardship rely on their smartphones for internet access even more than the general population, the report shows. Last year, the United Nations declared the internet a basic human right.

In 2016, smartphone ownership increased 12 percent among households earning less than $30,000 per year.

That’s despite the fact that people experiencing economic hardship often encounter tremendous barriers to owning them.

No credit = no contract = no subsidized costs

Smartphones themselves — the actual physical objects — are hella expensive.

The iPhone X will cost you at least a grand right off the bat. Samsung’s latest offerings aren’t much less. That’s a lot to shell out all at once, even for the well-off among us.

Many of us get around the staggering up-front cost by signing onto a long-term contract. Those split up the price over two years or so, and they generally run you about $70 a month — still pricey, but better than $1,000 all at once.

The contracts last at least two years, and they’ll cost you:

  • AT&T: starts at $70 per month
  • Verizon: starts at $75 per month
  • Xfinity: starts at $45 per month, if you have Xfinity internet service
  • Sprint: starts at $70 per month
  • T-Mobile: starts at $70 per month, if you enroll in autopay

Plus you’ll have to pay for the phone:

  • AT&T: from $4 to $33 over 30 months; or at least $50 up front
  • Verizon: from $5 for 24 months; or at least $114 up front
  • Xfinity: from $5 to $41 for 24 months; or at least $30 up front

So, the total cost to get a smartphone and a two-year plan ranges from around $75 to $200 in the first month — IF you pass the credit check.

However, contracts usually require a credit check to get started. So if you haven’t built up any credit, or don’t have good credit, you’re probably out of luck in the contract-phone world. For those experiencing economic hardship, there’s a good chance none of the above options will be accessible at all.

Prepaid plans are full of hidden fees

If you aren’t able to pass a credit check, you’ll have to sign up for either a month-to-month or prepaid plan.

Those plans could appear to offer you a bargain. Some start as low as $35 per month, but that includes only a tiny, 500 megabyte data package — enough bandwidth for around 10 hours of use across the entire 30-day period.

Some month-to-month plans look like this:

  • AT&T: starts at $45 per month for one 1GB of data, if you enroll in autopay
  • Verizon: starts at $30 for 500MB of data
  • Xfinity: starts at $12 for 1GB of data, if you have Xfinity internet service
  • Sprint Forward: starts at $40 per month
  • T-Mobile: starts at $40 per month for 1GB of data
  • Boost: starts at $35 for 3GB of data

While some prepaid plans look like this:

But though prepaid plans may have a lower initial price, the costs quickly add up.

First, you’ll likely have to pay the full cost of the phone upfront. Then, you’ll be vulnerable to sneaky charges like taxes and overage fees.

Some of the fees:

  • Most advertised cell phone costs don’t include taxes
  • You’re likely to max out on those tiny data plans, so be wary of overage charges
  • Several networks will upcharge you every month if you don’t enroll in autopay

How to get around the issue

They’re imperfect, but there are a few ways people can skirt some of the mounting smartphone costs.

AT&T, Verizon, Xfinity, Sprint, Boost and T-Mobile all offer a BYO phone option, so if you can snag an old phone from a friend — or buy one used for cheap — that could save you a few bucks. But you’ll want to check the device with your network first to ensure it’s compatible.

If you can’t afford a plan, you could also buy a smartphone — new or used — and rely on free wifi in public places to use it. Some iPhones on Philly Craigslist will cost you less than $50 (though we can’t endorse their quality).

There’s also at least one federal assistance program to help those who already qualify for public assistance like Medicaid or the Supplemental Nutrition Assistance Program. Assurance Wireless — a Sprint offshoot — will help fund one wireless account per household.

And T-Mobile offers a handful of discounts for senior citizens and members of the military.