Verizon is one of the biggest telecommunication companies in the United States, offering a wide range of services from mobile phones to internet and television. However, like any other service provider, they have policies and fees that may not be clear to the average user. One of these fees is the fee for breaking contract, which can be a headache for users who want to switch to another provider. In this article, we will discuss everything you need to know about Verizon’s fee for breaking contract, including why it exists, how much it costs, and how it can affect your credit score.
Why Does Verizon Have a Fee for Breaking Contract?
Verizon’s fee for breaking contract is not unique to the company. In fact, most service providers have similar fees in place to discourage users from canceling their contracts before they expire. When a user signs up for a contract with a service provider, they are agreeing to pay for a certain period, usually two years, in exchange for a subsidized device or a lower monthly rate. If the user decides to cancel the contract before the agreed-upon period, the provider loses money, which is why they charge a fee.
However, Verizon’s fee for breaking contract has come under scrutiny in recent years, as it is especially high compared to other companies. Some users have even filed lawsuits against Verizon, claiming that the fee is excessive and unfair.
How Much Does Verizon’s Fee for Breaking Contract Cost?
As of 2021, Verizon’s fee for breaking contract is $350. This fee applies to users who cancel their contract before the contract period ends. For example, if you signed up for a two-year contract and decide to cancel after one year, you will be charged $350. The fee is prorated, which means it decreases by $10 for each month of the contract you completed. So, if you canceled after 14 months, you would be charged $210.
It is worth noting that the $350 fee is only for smartphones and other advanced devices. If you cancel a contract for a basic phone, the fee is $175. Additionally, if you cancel within the first 14 days of signing up for a contract, you will not be charged a fee.
How Does Verizon’s Fee for Breaking Contract Affect Your Credit Score?
If you cancel your contract with Verizon and do not pay the fee, it can affect your credit score. When you sign up for a contract with a service provider, you are essentially taking out a loan for the device or service you are getting. Like any other loan, if you do not pay it back, it can have negative consequences on your credit score. Verizon can report your non-payment to credit bureaus, which can lower your credit score and make it difficult for you to get approved for loans or credit cards in the future.
Can You Get Out of Paying Verizon’s Fee for Breaking Contract?
While the fee for breaking contract may seem steep, there are a few ways to avoid it. One way is to transfer your contract to someone else. Verizon allows users to transfer their contracts to another person who is willing to take over the monthly payments. This way, you can avoid paying the fee and still get out of your contract.
Another way to avoid the fee is to wait until your contract period ends. While this may not be an immediate solution, it can save you money in the long run. Once your contract is over, you can switch to another provider or renegotiate your contract with Verizon.
Verizon’s Fee for Breaking Contract FAQs
1. Can you negotiate Verizon’s fee for breaking contract?
Technically, no. The fee is part of the contract you signed, and Verizon has the right to charge it if you cancel before the contract period ends. However, users have reported success in negotiating with Verizon’s customer service representatives. If you have a valid reason for canceling your contract early, such as moving to an area without Verizon coverage, you may be able to negotiate a lower fee or waive the fee altogether.
2. Does Verizon prorate the fee for breaking contract?
Yes, Verizon prorates the fee for breaking contract. The fee decreases by $10 for each month of the contract you completed. For example, if you canceled after 14 months of a two-year contract, you would be charged $210 instead of the full $350 fee.
3. How does Verizon’s fee for breaking contract compare to other providers’ fees?
Verizon’s fee for breaking contract is one of the highest in the industry. Other providers, such as T-Mobile and Sprint, have lower fees that range from $50 to $200. However, it is worth noting that some providers, such as AT&T, have a similar $350 fee for advanced devices.
4. Can canceling a contract with Verizon affect your credit score?
Yes, if you do not pay the fee for breaking contract, it can affect your credit score. When you sign up for a contract with a service provider, you are essentially taking out a loan for the device or service you are getting. If you do not pay back the loan, it can have negative consequences on your credit score. Verizon can report your non-payment to credit bureaus, which can lower your credit score and make it difficult for you to get approved for loans or credit cards in the future.
Conclusion
Verizon’s fee for breaking contract may seem like a hefty price to pay, but it is not unique to the company. Most service providers have similar fees in place to discourage users from canceling their contracts before they expire. While it may be frustrating to pay the fee, there are ways to avoid it, such as transferring your contract to someone else or waiting until the contract period ends. If you do decide to cancel your contract, make sure to pay the fee to avoid negative consequences on your credit score.