11 Apr 2005

Are Free Cell Phones Really Free?

If you're reading this article, you've probably done some research on cell phones on Google or one of the many other Internet search engines. Chances are you've seen countless sites and advertisements claiming to have FREE cell phones. You're thinking: "There's no such thing as a free lunch. So what's the catch?"

Why would anyone give away free cell phones?

In the United States, people typically agree to a 2-year term when signing up for cellular service. In exchange, customers are offered heavily subsidized phones. Devices that cost $200, $300, or more are sometimes offered for free with a service agreement. This subsidy is also why the penalties for canceling are large.

Authorized agents of phone companies, both in retail stores and online, make a commission whenever they get a customer to activate cell phone service. To sweeten the pot, they can give away free cell phones or sell them at a loss; but they recoup that loss when the carrier pays their commission. They only require that you get a cellular plan.

Can I get a free cell phone without a cellular plan?

Free cell phones are generally bundled with a new line of service -- either with your current provider or a new one. Even if you ask your existing phone company for a free upgrade, they'll likely ask you to recommit to another contract.

But the good phones are never free, are they?

At any given time, the cell phones you can find for free are much better than the most expensive phones that were available the previous year. Phones today are lighter and have longer battery life, better screens, bigger phonebooks, better speakerphones, etc.

If you shop around, you'll find that many free cell phones being offered online are the newest and most popular models available. While not all of them are free up front, you can usually find great deals (and even make cash back) on brand new phones with rebates.

The best free offers come from authorized online agents of the carriers.

Why is there a better selection of free cell phones online?

It would be nearly impossible for a single retail store to stock all the hundreds of devices available today. And even then, the retail shops have much higher operating costs than web stores.

On the other hand, online retailers can usually offer the best deals and the newest (read: more expensive) free cell phones because they have lower operating costs than brick-and-mortar stores. Most are authorized to sell for multiple carriers so you can compare service plans as well as pick the phone model you want.

How do I know the free cell phone offer I'm clicking on isn't a scam?

These types of offers are common practice and millions of consumers have taken advantage of them. That being said, you should exercise the same caution when shopping for a cell phone as you would with any online purchase. Check to see that the site offering the free cell phones:

Is an authorized dealer for the wireless provider
Uses a secure server to process your credit card information

What else do I need to know?

Over the life of your contract, the service is going to cost you more than the original price of the cell phone, so you need to be happy with the cellular plan you're signing up for too.

Because of the way cell phone retailers are paid commission, it is often, but not always, the case that you need to pay for the phone first and redeem a rebate for the price of the phone after you start your service. It is very important that you follow the rebate instructions in order to get your cash back.

Now that you're armed with the facts about free cell phone offers, browse the Point.com Phone Features, where we highlight the freshest deals in wireless.

InPhonic's tips on making sure you get your rebate.

Back to Cell Phone Articles Archive

Comments

I don't think Sprint PCS is fair. I just upgraded my plan to having 5 phones instead of two, and I didn't even get to pick my phone. Even though the phone was free, I don't think it was fair. And I asked the guy I was talking to if I could pick my phone and he said no. I was thinkin...well if I'm gonna pay for it think I should be able to choose it...That really sucks, and my phone is ugly too.

Posted by: Jordan at November 16, 2005 11:14 PM

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