Now is a good time to consider switching phone carriers. Exhibit one: T-Mobile’s new “Uncarrier Strategy.” In January 2014, T-Mobile, the smallest of the major U.S. carriers, announced a new initiative: It promised to pay AT&T, Verizon, and Sprint subscribers up to $650 to drop their current provider and move over to T-Mobile.
Sprint and US Cellular have similar deals, offering to pay early termination fees for subscribers of major U.S. carriers when they switch to their network. All this may sound good, but don’t think the wireless carriers will just hand you a bundle of cash. The carrier (or Uncarrier as T-Mobile prefers to be called) will pay the cost of your early termination fee up to a maximum of $350, and then up to $300 for trading in your old phone.
The onset of these kind of incentives marks an interesting period for unsatisfied cell phone customers. More than ever, it seems, cell phone carriers are engaging in a contract-arms race for your cell phone subscription. But how do you actually swap cell-phone carriers? How do you take advantage of these cash incentives? And is it possible for new customers to stick with their old phone?
We’ve put together a how-to guide to switch your cell phone carrier. Including how to get out of cell phone contracts without paying the early termination fee.
Note: Before you do anything, we recommend backing up your important data. Phone carriers can “port in” your data to new providers. For whatever reason, when you switch phone carriers, you’re at risk to lose data. Furthermore, when you switch wireless carriers, beware, you’ll most likely have to trade in your current phone. Here are a few steps to take on the path to liberation from your current carrier.
Before you make any drastic decisions, you should first compare all the major carriers’ plans. Here are a few things to consider:
Cost: How much will your service plan cost each month? This includes minutes, messages, and data. Most carriers have overage charges. For example, Verizon charges $10 per 1GB exceeded. T-Mobile is the cheapest of the major carriers and doesn’t have overage charges. Instead, the Uncarrier reduces your speed after you’ve exceeded your limit. Don’t worry though, because we’ve crunched all the numbers. Check out our best family plan and best individual plan guides.
Network: It’s also important to consider what kind of coverage can you expect from the each carrier. Verizon has the best and only nationwide 4G LTE Network, though AT&T and T-Mobile are expanding. T-Mobile is known for its shortcomings in rural areas, but excels in cities.
Phone selection: It’s nearly impossible to buy a phone from one carrier and take it to another (unless it’s an iPhone). AT&T has the largest selection of phones, but US Cellular lets you stick with your current device when you sign on.
Contract: Some carriers offer two-year contract plans with smartphone subsidies, as well as no-contract plans that require you to pay monthly installments on your new device. T-Mobile is the only carrier that does not offer a two-year contract option.
Do you need a large screen and a high-end camera? Do need the newest operating system? Decide what matters most. Then, reference our cell phone buying guide to find which phone and carrier is best for you. Sprint, T-Mobile, and US Cellular are now willing to pay your early termination fee when you switch networks (check each provider’s website for details). Before switching, it’s always good to reread your current phone plan and compare it to your desired new plan.
There are several different types of phone plans. Listed below is a quick breakdown on the pros and cons of each.
2-year contract: A 2 year contract will allow you to pay off your phone in monthly installments. You’ll pay a one-time subsidized fee. For example, the iPhone 6 will require a $200 down-payment on 2-year plans with AT&T and Verizon. That’s $450 less than the non-contract price.
Pro: You’ll only have to pay a one-time discounted payment for your new phone.
Con: You’ll pay more up front.
No contract monthly payments: All the major carriers offer an alternative plan that requires no up-front payment. Instead, you’ll pay off your phone over 24 months. Additionally, these plans (Verizon Edge, AT&T Next, Sprint Easy Pay, and all of T-Mobile) offer a slightly lower monthly monthly device fee compared to the 2 year contract.
Pros: Nearly $0 due upfront (you’ll still have to pay the taxes when you sign), no 2-year contract, no additional cost to upgrade, smaller device fee
Cons: You’ll pay a larger monthly bill than signing a 2-year contract.
Get a quote from service provider
Receiving a quote takes minutes. You can get quoted on each carrier’s webpage by simply shopping for a phone. When you select a phone a menu will appear outlining the prices of different service plans. They’ll give you a monthly estimate, but be sure to read the fine print about overage charges and other hidden fees.
Next page: Dodging those gargantuan early termination fees
Buy a phone and trade in your old one
Most trade-in plans have a few catches. Often, you have to trade in your old phone – and buy a new one from your new carrier. If you’d like to keep your old phone, consider unlocking it. To incentivize this trade-in, most companies are making the most of the newest phones. Most of the flagships are priced at $0 down, and will offer that credit of up to $300, depending on the phone you’re trading in. For example, a 16GB iPhone 5S will net you $282 of trade-in credit at T-Mobile. You’ll also have to port your number and start a new plan.
Keep your old account active
In most cases, your account must be active to switch your number over to the new carrier. Carriers call this process “port-in” and it means that your number, as well as your contact information will transfer from your old provider to your new provider, and assuming all goes well, from your old phone to your new phone.
Get out of that old plan
Once you’re activated your new phone, cancel your existing plan. The cancellation process begins when you bring your old phone into the wireless carrier’s store and terminate your contract. You’ll receive a final bill and (in every two-year service agreement) you’re liable to pay the early termination fee. In some cases, you’ll also pay a “restocking fee” for the phone, which ranges from $25-75. It’s a crappy charge that makes no sense.
There are ways to get out of your early termination fee. It’s not easy, but you might be surprised how far a good reason can go. For example, if you’re moving to a place that isn’t covered by the carrier, you stand a fighting chance of having the early termination fee waved. Of course, T-Mobile, Sprint, and US Cellular will pay up to $350 of your termination fee when you trade in your device at their brick-and-mortar store. Simply port your number in store, then, when you receive your final bill from your former carrier, submit it online to Sprint, T-Mobile, or US Cellular. Make sure you submit your ETF to your new carrier within a reasonable amount of time. In some cases, your ETF is only refundable 60 days after you activate your new phone.