Not Ending Service Contracts When There Are Better Deals
Financial Management

Not Ending Service Contracts When There Are Better Deals

This was actually a real scenario I saw which didn’t make much sense from a financial point of view. Imagine this. There is a person who currently using a cell phone under a pay to talk plan where for an annual fee each year they will get to talk for a certain amount of minutes each month. There aren’t any extras such as a data plan as it is strictly to make phone calls locally. In general the person only uses it when they really have to.

Now they actually have a service feature with their Internet provider where they could literally get free unlimited calling for no extra charge as long as they remain an Internet service customer. So it makes sense to just switch the phone plan to this. However, the thought of just leaving their existing contract when they still have about five months left seems wasteful. Because of that they decided not to switch over.

It still makes more sense to switch over and they will probably use it more as well knowing that its unlimited calling without the fear that they would have to pay extra fees. But I suppose the psychology of throwing away a plan that has been pre-paid is just too much.

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