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A phone upgrade for $0? Probably not.

You don’t have to upgrade every time a new model comes out

For most of us, cell phones are a fact of life. We use them, we love them, and then we replace them. Some people always want to have the latest model, and trade in their existing phone as soon as a new one becomes available. Other people like to keep their phones longer. Whether it’s because they’re comfortable with their device, or because of inertia, these people often view the process of replacing a phone with some anxiety. And for many people, that anxiety comes from the knowledge that replacing a phone also means dealing with a service provider, and making decisions about coverage, and carriers, and plans, and contracts.

Like many of you, my partner and I fall squarely in the latter group. We’ve both had our phones for more than two years, on a shared two-year contract that recently ended. Despite that, we weren’t in any rush to get new phones. Our existing phones met our needs, and we were comfortable with our plan, which had the features that we needed, without a lot of extras that we didn’t use (and didn’t want to pay for).

Sometimes your phone tells you when it’s time

A few months ago, however, my partner J. started having some problems with his phone, an iPhone 5S. Following a recent iOS update, he started to notice that the battery didn't last as long. J. doesn't use his phone that much - aside from making calls with it, and taking some pictures, the phone pretty much lived in his pocket. When he started having to charge the battery nightly, he began to think that it was time to look for a replacement.

Starting the process

Since our current phone plan is with one of the major national carriers, first we looked at their website. On the homepage we saw an ad for a deal that would let existing customers upgrade to an iPhone 8 for free. Free is good! We talked it over, and decided that as long as we could keep our out-of-pocket costs as low as possible, the time had come to make a change. When we went to a retail outlet for that provider, we asked about upgrading the phone, and mentioned that we had an existing plan that we were happy with.

The reality of “free” phones

As it turned out, the “free” iPhone 8 was only available if we upgraded to a new plan for another two-year contract. Because this new plan was going to cost us significantly more money on a monthly basis, we didn’t seriously consider this as an option. To keep our current plan, we would have had to buy the phone outright, and even allowing for a trade-in value on the old phone, this was also going to cost much more than we wanted to spend. Appreciating our desire to keep the overall cost down, the rep who was helping us mentioned an upgrade to an iPhone 7 that would let us keep our existing plan intact.

Contracts often = $$$

After a little more discussion, that's what we decided to do. The phone itself wasn’t free – it cost nearly $300, including the fee to add it to the account. Since our monthly plan has been reactivated for a further two-year term, that means that our actual costs have gone up by approximately $12 monthly.

What will we change next time? We will shop around. Although we’re comfortable with our current provider, comfortable isn’t always best, and I’m pretty sure that we could have had a better deal if we’d taken a bit more time to think things through. The next time we’re in this situation, we’ll be looking mainly at no-contract options, and we’ll be trying to bring our current phones along with us as well.

Here are 5 key things to remember if you’re upgrading your phone:

  1. Take some time and figure out your options.
  2. Be clear about what you must have, what you’d like to have, and what you’re willing to pay.
  3. Look at different providers – use a tool like this one that lets you compare different plans.
  4. Don’t be afraid to ask questions. There are almost certainly options available to you that aren’t advertised.
  5. Those offers that seem too good to be true? They probably are, so make sure you understand what your total costs will be. Remember – even though the phone itself might be “free,” with the increased costs of the contract, the service provider is still going to get their money.