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Why you should quit immediately

Loyalty is essential among friends. Compared to providers, it is usually a mistake. An example: mobile phone contracts. They’re getting cheaper every year.

A good four years ago, a cheap LTE all-network flat rate with 5 GB of data volume in the Vodafone network cost around 30 euros a month. Today you no longer have to pay 10 euros for it.

Provided you sign a new contract. Only new customers get cheap prices; the loyal customer base is milked as well as possible.

Our author Matthias Urbach is deputy editor-in-chief of the money guide Finanztip, which belongs to the foundation of the same name. © Quelle: Finanztip

The bill is even more unfavorable for a contract with a mobile phone. If you spend 10 to 20 euros more per month, you get a stylish mobile phone. The value of this is calculated in such a way that the mobile phone is paid off after the two-year minimum term has expired.

And the treacherous thing about the old mobile phone contracts is that if you don’t cancel a quarter of a year before they expire, the contract will be extended for another year. And you pay for it.

I know what I’m talking about: Four years ago, my family signed a super attractive contract with a new provider with the brand new iPhone 8. If we had canceled after two years, as planned, the device would have cost practically half the price. A real bargain. But in the end it got expensive because we missed the jump twice.

The legal situation for consumers has improved significantly

The good news for everyone: the new Telecommunications Act (TKG) came into force in December. Since then, contracts for mobile phones, landlines or the Internet can no longer be extended by a whole year. After the minimum term, customers can get out at any time with a month’s notice.

And don’t fret if you’re still stuck on an old contract. Because: The TKG also applies – retrospectively – to old contracts! It doesn’t matter what your contract says.

My tip: cancel it now! Such contracts are so easily forgotten. There is nothing wrong with canceling long before the minimum term expires. The provider will most likely get in touch in good time – with a better offer.

So the loyal one is the fool here.

Matthew Urbach is Vice Editor-in-Chief of the money guide Finanztip, which belongs to the foundation of the same name. He explains here every Tuesday how to arrange money things yourself. Urbach gives more tips in his weekly newsletter (finanztip.de/newsletter).

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