#one #year #phone #contracts
How to Get Out of Your Mobile Phone Contract
You covet the new iPhone 5 but have months, maybe years, left on your contract. Check out these ways to break your contract and move on.
Let’s not be coy this story exists so you can get a new iPhone 5. Obviously, you’ve seen just how thin, fast, and cool it looks. (It has so many more icons on the home screen!) You want one so badly, even if it means breaking the terms of a legal agreement with your current mobile phone carrier.
Well, don’t feel guilty. Carriers aren’t exactly in love with you either, just your money. That’s why they make sure to sign you up for a two-year contract in the first place. (the better to guarantee they recover the true cost of that little handheld computer you call a smartphone.) That’s why there’s an early termination fee if you do cancel early. Sometimes that fee could be as high as $350. (Hey, carriers gotta make a living too, amirite? They can’t live off outrageous SMS fees alone.)
There are a variety of reasons why you may want out of your contract. Maybe you hate your current carrier. Maybe you just want to switch to another carrier. Maybe you want to get an unlocked iPhone to use on the one carrier that can’t sell the iPhone. (Poor T-Mobile .) Maybe you don’t mind your carrier, but simply want to upgrade your phone early. That’ll cost you the unsubsidized price of the device. On Verizon, for example, that’s $649 for an iPhone 5. Ouch.
If you want a new phone or a new carrier, no one but the current contract holder would really hold it against you. But how on earth do you break the seemingly iron-clad terms you signed? It’s not easy. Chances are your wallet won’t come out of the fight unscathed. If you really, really want the iPhone 5’s, though, here are the best ways to try to pull it off legally (and somewhat less legally).
1. Cancel Early
If you very recently signed a contract for a new phone with a carrier, you probably have a period of about 14 days (or 30, if you’re lucky) to go back in to the store and get a refund. You’ll pay a “restocking” fee and perhaps a couple other minor charges, but if the timing is right, you can get out of the contract very early on.
2. Just Pay the Fee
Early termination fees (ETF) suck, but at least they are limited. For a smartphone (or tablet or laptop or other high-end data consuming device), the highest you’d pay is $350 (with Verizon or Sprint). T-Mobile’s highest is $200 and AT T’s is $325. The ETFs are much lower for feature phones. All of the carriers prorate their fee based on the amount of time actually left in a one- or two-year contract; it goes down by $5 or $10 a month for each month of “completed service commitment” (as AT T puts it).
MyRatePlan.com has an ETF calculator that will tell you just what you would owe today based on when your contract with any of the four major carriers ends.
Just don’t think you’ll get out very cheap, even if the end is near. The ETF calculator shows that a two-year smartphone contract with Verizon ending on the last day of this month (September 2012) would still cost $120! Once you pay, however, you’re out and they can’t suck you back in. Even combined with buying a new price-subsidized smartphone, that’s still usually cheaper than paying the non-subsidized price.
A great way to offset the fee: sell your old device. Our own Wendy Sheehan Donnell, managing editor of consumer electronics and mobile, plans to sell her Verizon iPhone 4S to Apple for $255, which will more than cover her $250 ETF. Then she’s getting an iPhone 5 from AT T. Otherwise, she’d have to wait until June 2013. Here are some places that buy old phones: Apple Recycling. Amazon Electronics Trade-In. Gazelle.com, Glyde.com, and uSell.com.
3. Family Upgrade
If you’re on a family plan, find out which of your relatives has an upgrade coming and steal it. This doesn’t technically get you out of your contract, but by using a familial phone upgrade before you’ve finished your own two years, you can skip the ETF and go right to a new phone as long as you are willing to pay the subsidized price of the device and sign on for another two years. (It’s not even really you using the upgrade; the customer service reps do the upgrade for your relative and then just transfer the phone to you, so both you and mom are locked in for another two-year contract.)