A new change makes prepaid phones a worse deal than before

Last week, the FCC officially scrapped an earlier arrangement with Verizon that had required Verizon-locked phones to be unlocked in just 60-days after full purchase. When this was announced, I knew what this meant for me and many others: many prepaid phones would now become much worse deals than ever before.

How does Verizon’s change impact the prepaid market? We’ll get to that shortly, but first, some important background is needed.

For those who don’t already know, Verizon owns a large portfolio of prepaid carriers unders it Verizon Value brand umbrella. This includes brands like Tracfone, Visible, and Straight Talk. The latter of these usually offered exceptional phone deals through Walmart. I previously highlighted how I’d bought an entry-level Motorola phone for my son, and saved a fair amount over its unlocked equivalent, even when factoring in the cost of 60-days of service. Unfortunately, this advantage is now gone.

Starting January 20, new Verizon Value-branded phones will require 365-days of active service before they can be unlocked from the network. This means you won’t be able to easily switch to another provider and will have less flexibility when it comes to shopping around for the best monthly service rates. I can tell you right now that had this policy existed back in 2025, I wouldn’t have gotten a Motorola phone through Straight Talk. Simply put, there are cheaper services out there, and I wouldn’t want to be locked in for a full year.

While I typically recommend unlocked phones for most folks anyhow, prepaid phones under Verizon were previously a great way to take a chance on a cheap device for a kid (or even adult) that isn’t very good at keeping their phones protected and safe without having to pay much upfront. That benefit still exists, but now you’re forced to stay with the provider that you bought the device from. In my experience, the better a device’s deal is up front, the worse the service’s pricing is relative to its competitors. While this isn’t always true, the prepaid phone market is definitely much less appealing now that the change is official.

I do wonder if the change will cause a decline in new subscribers who are willing to take a chance on prepaid phones. While I understand there are profits to be made by axing the old policy, it feels like Verizon could have absorbed some of the shock by at least shifting to a 6-month period initially. I want to know your take, though. Let us know in the poll below.