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Cell-Phone Transition Trap Can Be Costly

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Beware a costly trap that involves the transition between one cell-phone carrier to another. More than 25 million consumers are expected to switch cell-phone carriers this year, up 20% from five years ago, thanks to the rise of no-contract carriers reimbursing switching costs. But you will be charged for any unused days from the last month of your old carrier’s billing cycle, which could be costly if you switch several weeks before the final cycle. What to do: Wait until a few days before your old cycle ends to start your new service.

Other traps to be aware of when you switch cell-phone carriers:

Trap: You assume that you can use your old phone with your new carrier’s service. It used to be that you couldn’t use a phone that was compatible with AT&T or T-Mobile when switching to Sprint or Verizon, or vice versa, because they had different network technology. Those compatibility issues have been largely eliminated, but exceptions remain. For example, LG and Motorola Moto phones purchased through AT&T still aren’t compatible with Sprint and Verizon. What to do: Check with your new carrier to confirm that you can activate your existing phone on its network. Many carriers have web pages where you can check.

Trap: You are counting on your new carrier to pay your early termination fee (ETF) and other switching costs. If you’re stuck in a two-year contract with an old carrier, many new ones now promise to rebate you the ETF and/or cover the remaining payments left on your phone installment plan. Reality check: AT&T, Sprint, Verizon and T-Mobile will all reimburse you a maximum of $650 per line if you switch. But it’s not as good a deal as it sounds. To qualify for a reimbursement, these carriers require that you (and each member on your plan if you select a family plan with multiple lines) hand in your old phones to the new carrier, which means you can’t continue using them and you can’t sell them…and buy new phones from the new carrier, which could add up to hundreds of dollars.

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Source: Logan Abbott, president of the independent cell-phone comparison site MyRatePlan.com, which was launched in 1999. Date: August 1, 2017 Publication: Bottom Line Personal
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