Thursday, February 22, 2024

There is no such thing as a free iPhone. However, phone carriers like AT&T, Verizon, and T-Mobile advertise promotions that claim to offer a “free” iPhone 15 Pro. To qualify for this deal, customers must trade in an older phone and sign up for a wireless plan. But in reality, these promotions often end up costing customers more in the long run because they require them to subscribe to expensive service plans with unnecessary features.

To test the promotions, I entered numbers and talked to store representatives. For example, trading in a three-year-old iPhone 12 (the average upgrade cycle) through Verizon’s promotion would cost around $3,240 over 36 months, which is $300 more than purchasing the new iPhone with a cheaper plan. AT&T’s promotion would cost around $2,675 over 36 months, slightly more than trading in the old phone and selecting a cheaper plan. T-Mobile’s promotion would cost $2,400 over two years, about $160 more than buying the new iPhone with a cheaper plan.

According to Toni Toikka, CEO of Alekstra, people who believe they are getting free phones from carriers are in for a surprise. Carriers like Verizon claim that customers can choose their plan, claiming the promotions are for those seeking the best network experience. T-Mobile emphasizes that their deals include more than just free phones and aim to provide value through premium plans with perks like Netflix streaming and regular upgrades. AT&T declined to comment.

While trading in an old phone to reduce the cost of a new one is a smart way to save money, it’s important to be wary of promotions advertising freebies. Let’s delve deeper into the iPhone giveaway promotions from Verizon, AT&T, and T-Mobile. Additionally, I’ll share some better options for saving money through trade-ins.

Verizon’s promotion requires trading in an iPhone 12 for $1,000 in bill credits spread over 36 months. To qualify, customers must choose the $90/month Unlimited Ultimate plan, resulting in a total cost of $3,240 over three years. Alternatively, trading in the iPhone 12 and selecting Verizon’s cheaper $65/month Unlimited Welcome plan would offer $415 for the old phone. The total cost over three years for the iPhone 15 Pro on this plan would be $2,925.

Verizon’s Unlimited Ultimate plan offers 60GB of mobile hotspotting, but this is a feature few people need. Only 4% of mobile users consume more than 50GB of data per month. Therefore, opting for the free iPhone promotion would result in spending $315 more over three years for unnecessary perks compared to trading in the old phone and choosing a cheaper plan.

AT&T offers up to $1,000 off the iPhone 15 Pro with an eligible trade-in. Only the most recent and expensive smartphones such as the iPhone 14 Pro are eligible for the full credit. The promotion provided $700 of credit for the three-year-old iPhone 12 over 36 months of bill payments. This brought the iPhone 15 Pro’s cost down to $8.30/month for three years. To qualify, customers must select one of AT&T’s eligible data plans starting at $65/month. With all costs included, the total for buying the iPhone 15 Pro and using it on AT&T’s network with an eligible plan over three years would be $2,675.

However, trading in the iPhone 12 and selecting AT&T’s cheaper $50/month Value Plus plan would offer $200 in credit for the old phone, reducing the iPhone 15 Pro’s price to $800. The total cost over 36 months on the cheaper plan would be $2,635. The main difference between the plans is that the $65 plan includes 3GB of mobile hotspotting. So, through AT&T’s promotion, customers would pay about $40 extra over three years for a plan with a mobile hotspot feature.

T-Mobile’s promotion promises a free iPhone 15 Pro when trading in an older phone and signing up for its Go5G Next plan at $100/month. The free iPhone is provided through bill credits spread out over 24 months, resulting in a cost of about $2,400 over two years. However, if customers choose the cheaper Essentials plan at $60/month (which is not part of the promotion), T-Mobile would offer $200 for the iPhone 12. After purchasing the iPhone 15 Pro for $800, the total cost over two years would be $2,240.

T-Mobile’s cheaper Essentials plan includes 50GB of high-speed data, which is more than enough for most users. The Go5G Next plan offers unlimited high-speed data and subscriptions to Netflix and Apple TV+. So, customers would pay roughly $160 more over two years for extra data and streaming services through this promotion.

It can be challenging to determine whether the more expensive plan offers additional value, according to Mr. Toikka.

Promotions are temporary, and once they expire, wireless service rates are likely to increase, resulting in higher costs for customers. However, don’t let these promotions discourage you from trading in your old phone to save money. Websites like Gazelle, Best Buy, Amazon, and Swappa offer cash or store credit for used phones. Their quotes are often higher than those of phone carriers. To reduce phone costs, shop around for the best trade-in offer and select a wireless plan that fits your budget and needs.

For example, I sold my wife’s iPhone 12 through Gazelle for $312 in cash. She used this money towards buying an iPhone 15 directly from Apple, reducing the new phone’s price to about $500. She also stuck with the cheap family plan she has used for years, avoiding unnecessary expenses on a fancy wireless package.

Although it’s not free, it is a better alternative to spending extra money on features and services you won’t use.

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