“When Are We Free To Leave Our Family Plan?”

If you have an individual plan with your wireless phone carrier, it’s pretty easy to figure out when you can leave it to save money. It will be two years from the day you signed your contract. In most cases you can opt out earlier if you’re willing to pay something called an early termination fee (ETF). But what happens if you have a family plan where three, four or more people are on the plan? When are you free to leave it?

It might be called a family plan but …

The short answer to this question is that while you might be on a family plan, each family member has his or her own contract. For example, if you have four people on a so-called family plan, there are really four individual contracts. This means that each of you has a different date when your contract will expire. Unfortunately, the only way you can know whose contract expires when is to go online, access your account and see when all your contracts will expire.

Early termination

Every major wireless carrier now prorates his or her early termination fees. What this translates into is that at a certain point, your carrier will reduce the cost of your early termination fee each month until the contract ends. I think in my case its $20 a month. This means if I wanted to end my contract four months early, it would cost me $80. However, I have found that there is some wiggle room. I had about four months left on my contract but wanted a new phone. I contacted my carrier’s customer service department and discovered that they were able to do an “override” so that I could get a new phone immediately. Of course, I did have to sign a new two-year contract.

When your contract expires

If you wait until your contract expires, you don’t have to sign a new one. You can just keep using your existing phone on a month-to-month basis. You can quit the service anytime you wish. If you want a new phone without signing a new contract you could pay full price or find a compatible device on eBay or get one from a friend or relative. As long as you don’t sign a new contract, you will be contract free.

Everyone’s free to go

Because each family member is on an individual contract, he or she can leave their current carrier whenever their contract ends. If some family member opts out, this has no effect on anyone else’s contract. If one family member has 16 months left on his or her contract, there will still be 16 months remaining. And their monthly charges will remain the same.

If the whole family wants out

The net/net is that if the whole family wants to leave its current carrier, everyone will just have to let their contracts lapse until all four have expired. They could then take their business to a new carrier, sign new contracts and all four would then have the same expiration date. Of course, in the meantime, everyone would just have to stay with his or her current phones on a month-to-month basis.

One caveat

One thing to watch for is how your carrier prices add-on lines. Our carrier charges just $9.95 a month per line. If one of us were to opt out and go to another wireless carrier, the cost would probably increase to something like $59 a month, plus $20 for 300MB of data. As you might guess, this pricing strategy serves as a strong incentive to keep people from opting out.

Consider this type of contract carefully because in the long run, it might be costing you more than what you should be paying. You could have used that money for something else – like saving, investing or even paying off your multiple debts.