If your tax refund is about to hit your bank account, you should consider using part of it to save money on your phone bill by purchasing an annual phone plan.
These plans allow users to purchase 12 months of service for one discounted upfront cost. The average American family of four spends around $244/month on postpaid plans from major carriers. Switching to a prepaid annual family plan could drop your bill to just $100/month and save you over $1,700/year.
With the average refund expected to be over $2,000 for most filers this year, you can easily spend a portion on an annual phone plan and still have plenty left over to treat yourself. This is one of the easiest ways to leverage your tax refund to save on your phone bill.
Let’s learn about how using your tax refund to switch to an annual phone plan is one of the best money moves you can make this year.
How do annual plans save me money?
Annual phone plans—also called yearly or 12-month plans—are prepaid phone plans that cover a full year of wireless service for a single upfront cost.
Postpaid unlimited plans from major carriers like AT&T, Verizon, and T-Mobile can cost up to $100/month for a single line. MVNO unlimited plans from carriers like Mint Mobile, Visible, and US Mobile can start as cheap as $25/month. These MVNOs offer the exact same coverage as the major carriers, letting you save on the networks you already use.
While these carriers already offer cheaper pricing on their plans, you can save even more by switching to an annual plan. MVNOs typically offer extra discounts with annual options since they know you're locked in for a full 12 months of service.
For each line you switch to an annual plan on these popular MVNO carriers, you can save:
- Mint Mobile Unlimited offers a $120/year discount
- The Visible plan gets a $25/year discount
- US Mobile Unlimited Starter gets a $30/year discount
Popular MVNO annual phone plans
| US Mobile Unlimited Starter |
Visible Base Plan |
Mint Mobile Unlimited |
|
|---|---|---|---|
| Annual cost | $270 | $275 | $360 |
| Monthly rate | $22.50/mo | $22.92/mo | $30/mo |
| Network | AT&T | Verizon | T-Mobile |
| High-speed data | Unlimited | Unlimited 5G | 50GB premium |
| Hotspot | Unlimited | Unlimited (5Mbps) | 20GB |
Families can save even more
For a single-line plan, an annual option is a solid deal. For families, the savings really start to stack up.
A family of four on T-Mobile's Experience More plan pays $215/month, or $2,580/year for service. That's just for the plan and doesn't factor in device costs or other extras.
If that same family switches to the Mint Mobile Unlimited annual plan, the total cost of service drops to $120/month or $1,440/year. For access to the same network, switching equals $1,140 of savings back in your pocket, largely funded by a tax refund that could've otherwise evaporated in your Amazon cart.
What to watch out for when picking an annual plan
While annual plans are great for saving money, they may not be right for everyone.
One of the most important things to remember is that annual plans don't offer mid-year refunds. If you decide you don't like your plan and want to switch carriers before your year is up, most carriers won't return the unused balance. Before signing up, you should always check:
- Coverage in your area: Each MVNO runs on a major network, but real-world performance varies by location. Check coverage maps for your home address before pulling the trigger.
- Data needs: Make sure the plan you're interested in meets the needs of you and your family.
- Current promotions: Carriers rotate deals on annual plans regularly to attract switchers. You may find an even better deal by checking with several MVNO carriers.
The bottom line
If you're still on a monthly postpaid plan, this is one of the easiest ways to leverage your tax return and save on your monthly bills. Annual phone plans offer real savings on the networks that you're already using. All you have to do is switch.
That said, if an annual plan doesn't work for you, you can also use your tax return to pay off your device installment plan and switch to a cheaper carrier, or buy a new unlocked phone for your next upgrade.
Max McCaskill
Sr. Staff Writer
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