Verizon dumps annual contracts; Here's how to save money with your phone bills

This may come as a shock to most, but Verizon will eliminate its two-year service contracts on Thursday, along with its $100 or $200 discount phone offerings.

Verizon, along with T-mobile is dropping contracts and discounted phones for their new customers. Their new offerings require customers to pay the full retail price through a monthly, interest-free installments.

This new system could easily be a boon in the long run because the older system will have customers paying for higher fees even after their contract is over. In Verizon's new plans the customers can keep the savings when they choose cheaper phones with the features and performance they need.

The new plans will be more flexible. The four new plans to choose from include Small (1GB), Medium (3GB), Large (6GB), and Extra-large (12GB). The new plans will no longer have down payments, annual contracts, and activation fees. You can pay for the phone you want upfront or through a two-year monthly plan. One of the best ways to save money in Verizon's new plan is to keep the existing phone and simply buy a big data package. The customers who are signed on an annual contract can stay on the current plan, or get the new plan without extra fee. One of the main reasons for this radical transition is because of the feedback from the customers that the company got.

When the customer keeps his or her current plan and buy a big data package, they can save somewhere between $20 and $40 a month.

Verizon has a no-contract plan called Edge. The new plan of offered by the nation's biggest wireless company is cheaper than the existing Edge plan. This means Edge plan customers should also switch to the new plan to save more. 

If you are a new customer, it would be best to b opt for the larger plans.

With the elimination of the two-year smartphone contracts for the new customers, Verizon is providing more transparency with their formerly very opaque processes. Now, customers will now how much they are really paying for and what exactly they paying for.