How to hack T-Mobile’s breakup plan and save hundreds on an iPhone


Photo: Jim Merithew/Cult of Mac
Photo: Jim Merithew/Cult of Mac

There’s a reason T-Mobile’s offer to pay off new customers’ early termination fees sounds too good to be true. In certain cases, it’s a rotten deal compared to just paying the fee yourself.

However, with a little hackery, you can flip T-Mobile’s deal from bad to fantastic — and save hundreds on a new iPhone (or any smartphone).

The devil in the details

As one would suspect, the key lies in the fine print of the deal offered by T-Mobile (and recently matched by Sprint). The incoming customer must trade in a phone in working condition and buy a new phone they might not need.

If you’re happy with your phone and have already paid off more than 50 percent of its cost, why trade it in? Take, for example, the case of a Verizon customer who purchased an iPhone 5s 64GB at the subsidized/upgrade price and added plus AppleCare+ to protect the investment. The customer paid $399 down plus approximately $80 in tax plus $99 for AppleCare+, or about $578 up front. The remaining $450 of the device’s full retail cost is baked into Verizon’s 24-month contract, at a subsidy of $18.75 per month. Now, four months later, the customer wants to switch to T-Mobile and is faced with an early termination fee of $310 (the original $350 fee has dropped by $10 per month).

In this scenario, which is a better deal? Simply paying the early termination fee, walking away from Verizon with the iPhone 5s in hand and popping in a T-Mobile SIM card? Or taking up T-Mobile on its offer to pay the fee and trading in the 5s?

By a factor of many hundreds of dollars, the better deal is to just pay the fee if you really want to switch and you’re not willing to deploy the hack I’ll outline below. While early termination fees are often viewed as big and scary, the reality is that most of the penalty paid represents the unpaid cost of the phone — more or less (depending on how many months remain in the contract) what the customer would have paid had she purchased the phone at full retail price.

Let’s examine the first scenario — paying off the early termination fee yourself and switching from Verizon to T-Mobile or Sprint. Four months into the Verizon contract, the cost of the phone to you would be your upfront $578 + $310 ETF + the 4 months of subsidy you already paid for as part of your plan, $18.75 x 4 = $75, thus, your total cost for the iPhone would be $963. Amazingly, in this scenario, you actually paid a little less than you would have had you purchased the exact same phone at full retail (roughly $1,028 including tax and AppleCare+).

How can that be? While Verizon is subsidizing $450, the initial fee for breaking your contract is only $350; it takes almost a year before the $10 per month drop in the early termination fee catches up with the $18.75 monthly subsidy.

Now let’s imagine you take T-Mobile’s offer to let them pay off the early termination fee, which requires you to trade in a phone and buy a new one. (Sprint’s offer, available through May 8, appears to work the same way.) T-Mobile would hand you a measly $300 for your shiny, four-month-old iPhone 5s with AppleCare+ that you paid $653 for (upfront costs plus four months of Verizon subsidy payments). Assuming you bought the exact same phone from T-Mobile and purchased AppleCare+ again, you’d now owe $728 after deducting the $300 you received for the trade-in.

The bottom line in these scenarios: Pay Verizon’s early termination fee and you actually save a little money compared to paying full retail for a new phone. Take T-Mobile’s deal while trading in your current phone and you lose $353 of accrued value.

Certainly there are some scenarios in which it makes sense to hand in your current phone and take the early termination fee reimbursement offer. For example, if you’re unhappy with your current phone and it’s not worth much. However, I suspect the following holds true in most cases: If you are nearer to the start than to the end of a two-year contract and you’re happy with your phone but want to switch to T-Mobile, it’s better to pay the early termination fee yourself and bring your own device (assuming it’s compatible with T-Mo) than to accept the Un-Carrier’s breakup offer … unless you want to deploy some hackery! The same holds true if you’re switching to Sprint, but chances are lower that you’ll be able to activate your current device on Sprint’s network than on T-Mo’s.

Hack T-Mobile’s offer to make it work for you

Here’s how to flip that bad deal into a good one. T-Mobile does not force you to trade in the phone you currently use under its early termination fee reimbursement offer — you just need to hand over a working phone. Go on craigslist, buy the least-expensive flip phone you can find that’s compatible with your current carrier (you should be able to find something for between $5 and $30), then trade that in while retaining your smartphone. Then, assuming you have no use whatsoever for a new phone, buy T-Mobile’s least-expensive flip phone (currently the Alcatel 768 for $72) and sell it on Craigslist or eBay for at least $20. Thus, you’ll be spending about $82, but receiving an early termination fee reimbursement that pays off your existing phone.

Using the same example of a Verizon iPhone 5s 64GB owner who is four months into the contract, the net benefit would seem to be $228: a $310 early termination fee reimbursement minus $82 in costs. However, because the subsidized value of the iPhone that’s not been paid off to date is $375 at full retail, using this method results in a $292 net benefit.

If you’re happy with your current phone and want to switch to a Sprint Framily plan, this hack may not be as effective. So far as I know, once an iPhone is activated on another network, Sprint is either unwilling or unable to activate it on their network. Furthermore, current-model iPhones that work with AT&T, T-Mobile and Verizon are not fully compatible with Sprint’s LTE network bands.

Since you probably can’t bring your current phone with you, you’ll have to buy a new phone. In that case, your best bet is to sell your current phone for maximum value on craigslist or eBay, buy a low-end flip phone compatible with your current carrier, and trade that in when you move to Sprint and take advantage of the early termination fee reimbursement. Note that Sprint’s deal requires you to trade in your “current device” — but who’s to say the cheap flip phone you’re trading in isn’t your current device?

How to save $368 on your next iPhone

If you’re in the market for a new iPhone and eligible for upgrade pricing with one of the major carriers, this hack gets even better. Given that there’s a $100 difference between the amount Verizon subsidizes ($450) and their early termination fee ($350), and this gap-in-your-favor decreases over time, the biggest upside you can gain using the hack is if you deploy it at the start of your contract.

If you do so, you’ll save a whopping $368 on a new iPhone. That factors in the net $82 cost of buying the used flip phone you’ll trade in as well as buying the Alcatel 768 or other cheapo phone you’ll sell. That means you could tomorrow buy a 64GB iPhone 5S for a net total cost of $660 (including taxes and AppleCare+) instead of $1,028. Wow! Let’s hope this still works in September when the iPhone 6 presumably launches.

Caveats and special cases

The math probably works out similarly for other smartphones, but Verizon iPhones are probably your best bet, because they’re unlocked out of the box. The Verizon 5s and 5c are fully compatible with T-Mobile’s LTE network (the old iPhone 5 apparently is not). Last I checked, AT&T iPhones are locked out of the box and you must ask AT&T to unlock them, which I’ve never tried (perhaps readers can inform us in the comments about AT&T’s current unlocking policies and whether this is doable on Day 1 of a new contract).

Whatever you do, stay away from Sprint iPhones. They’re locked out of the box, and when I asked Sprint to unlock my iPhone 5 for domestic use, the carrier refused. I’ve never heard of any workable method of unlocking a Sprint iPhone for use on T-Mobile short of using a Gevey SIM. In any case, it appears none of Sprint’s iPhones are compatible with T-Mo’s LTE network.

What should you do if you’re eligible for upgrade pricing but have a few months left on your contract with a carrier such as Sprint? In that case, switch from Sprint to Verizon. If there’s an early termination fee, pay it yourself (assuming it’s small because you only have a few months left). Then deploy the hack!

Or wait for your contract to end, and hope T-Mobile’s maverick CEO John Legere doesn’t read this article and change the fine print of his company’s breakup offer.

Don’t forget, you must port in a postpaid, on-contract phone number to take advantage of the ETF offer. If you’re on one of the smaller prepaid carriers, you’ll need to port your number twice — first to Verizon, for example, then to T-Mobile.

P.S. Anyone want to buy a new, still-in-the-box Alcatel 768?

  • Matt Myers

    I may be one of the few who were able to get a 5s unlocked through att. I purchased mine in October of 13 and had it unlocked in January. My trick was that I called and told them my company was sending me overseas. After about a week, it was unlocked. I was sent status updates through text messages from att. There was never a question of whether or not they would either. The overseas topic was that I could use my company phones SIM card if it were to be unlocked.

    • Art

      I had my phones unlocked through ATT only after the end of the contract. During international trips I had to use their international plan and pay the expensive fees.

      • Matthew Taylor

        Yikes, that’s b.s. I’m happy with T-Mo’s new international plans, took my phone to Mexico and had decent speed data, unlimited texting, and .20 per minute calls. Nice.

    • Matthew Taylor

      That’s a great tip! :) Thanks for sharing it.

  • beyondthetech

    Back before Uncarrier 4 was announced by T-Mobile, I was so pissed at Verizon that I traded in my iPhone 4S to them for a credit of 200USD that went towards my bill (all other places to trade in a 4S were just over 100USD and I wasn’t willing to take the time to sell it on CraigsList). So, when Uncarrier 4 was implemented, I had no phone to trade in, just a number to move over. I quickly went next door to Sears where they were blowing out prepaid phones for 5USD and used it as a trade-in at T-Mobile. Voila, ETF paid and new iPhone 5s.

    • Matthew Taylor


  • dcj001

    Matthew Taylor.

    Why are you trying to teach people how to scam cellular telephone carriers in the first Cult Of Mac article that I have seen with your name on it?

    You only get one chance to make a good first impression, and you blew it.

    • Matthew Taylor

      I think I did everyone a service — both customers and carriers — by exposing both the not-so-obvious potential downsides to T-Mo’s ETF offer, and the loopholes that can be used to a customer’s advantage. A lot of customers don’t have the time or energy to think through the math implications. Part of what hackers do is expose vulnerabilities to create transparency for all involved parties.

      • dcj001

        Oh. So you think that hackers are cool, and you have aspirations to be like them. Many people like you, today, have the mindset of a cheater,

        Here is one example in which you recommend lying to save money:

        “Here’s how to flip that bad deal into a good one. T-Mobile does not force you to trade in the phone you currently use under its early termination fee reimbursement offer — you just need to hand over a working phone. Go on craigslist, buy the least-expensive flip phone you can find that’s compatible with your current carrier (you should be able to find something for between $5 and $30), then trade that in while retaining your smartphone. Then, assuming you have no use whatsoever for a new phone, buy T-Mobile’s least-expensive flip phone (currently theAlcatel 768 for $72) and sell it on Craigslist or eBay for at least $20. Thus, you’ll be spending about $82, but receiving an early termination fee reimbursement that pays off your existing phone.”

      • Matthew Taylor

        Check the Eligibility Requirements on T-Mobile’s ETF Reimbursement offer. “You would need to trade-in a mobile phone or tablet…” There is no requirement that you trade-in an expensive, high-end smartphone for which you’ve already paid off more than 50% of the cost. Note that it’s entirely possible T-Mobile intentionally worded this in the way they did, knowing that some savvy customers would trade in whatever old phone or tablet they had lying in a drawer somewhere, which is another perfectly reasonable approach as opposed to buying a phone off Craigslist.

      • Matthew Taylor

        Per T-Mobile’s Eligibility Requirements, “You would need to trade-in a mobile phone or tablet…” T-Mobile does not force the customer to trade in a fairly new, high-end smartphone for which she’s already paid more than half the cost. Notice it doesn’t even say “smartphone,” it says “mobile phone.” There are plenty of people out there with old phones and tablets sitting in dusty drawers who would be drawn to this offer exactly as it’s worded.

      • Matthew Taylor

        Here’s another scenario where trading in a non-smartphone is the way to go. Let’s say your recently-purchased smartphone is lost or stolen, and right around that time you’re fed up with your carrier and want to switch to T-Mo and take the ETF Reimbursement offer. What are you going to do: buy a brand new smartphone from your current carrier, then immediately trade it in? Of course not. You’d trade in the least expensive flip phone possible.

      • Sean McCabe

        Are you kidding me?? Are you aware of how lying and deceiving phone companies are? This is what T Mobile is currently offering I don’t see how this is lying in anyway what so ever.

      • dcj001

        I am not aware of how lying and deceiving phone companies are, as you suggest that they are. Please elaborate.

        Also, do you believe that you and others should lie to phone carriers so that you can steal money back from them that you think that they have stolen from you?

        Your apparent lack of morals suggests that you are unable to understand a logical and ethical explanation.

      • Sean McCabe

        You sir are sadly mistaken if you think these companies don’t care about anything else other then our money. Check out this article.

      • paultravis

        DCJ, I am trying to figure out whether you work for a carrier or possibly a marketing company that has equally “hackable” terms.

        I don’t see that there’s any lying going on; simply creative interpretation of the very explicit terms and conditions.

        As an aside, I used to make a point of telling my friends who had paid for their iPhones many times over with AT&T to upgrade — otherwise they were paying artificially high service prices. Where does that land on your ethics meter?

      • IamTwone

        There another loophole to. I came from sprint bought the nexus 5 from radioshack for $50 traded in a evo 3D with a cracked screen to tmobile. Bought a $100 android phone spoke to tmobile rep told them i bought a nexus 5 outright gave them the info from the phone. Went back to the mobile store returned the $100 android even though they charged me a restocking fee of $50 they gave me a $50 credit on my bill. and within 6 wks i got my mastercard to payoff sprint no issue at all.

      • claytonkimball

        I am half way through this process and just noticed the Radio Shack policy of charging the rest of the unsubsidized phone price ($600 in my case) in the form of a cancellation fee if the line is cancelled within 90 days. It’s very explicit that this is in addition to any ETF with your carrier. Did this not apply in your case?

      • IamTwone

        Nope was never charged by radioshack there ETF because I didnt cancel i ported over and others are correct. Because I have been told by many T-mobile employees as I try to get my friends over to tmobile that they have note 3 or s4 to get an old phone to traded in and better off selling there phone since tmobile isnt giving that much, The only issue i had was the tmobile kinda cut close to carriers sending the etf to collections before you get the mastercard I was a week and half away from sprint sending my acct to collections before i received the card.

      • NWGuy

        I did exactly what you described here – at the direction of the T-Mobile customer service rep where I switched. It’s not a scam in any sense if the company’s own employees are telling you what to do and how to do it.

      • Matthew Taylor

        Rock on Rick. Thanks for the insight! I wonder how many people out there either figured this out on their own, or were tipped off by a T-Mo employee as you were?

      • Matthew. Ignore the haters, and people who are trying to say you are wrong. They are still being fooled by these companies thinking that the customer is whose really in mind when things are created.

        There is nothing wrong with anything you said in this post. I for one enjoyed your article, it was very informative. Thank you.

      • Matthew Taylor

        Thanks much, appreciate the kind words!

    • Sean McCabe

      what crawled up this guys butt?

    • Derek Schlicker

      I think this is a great article and I for one welcome anyone who can explain how to save money on their phone trade ins.

      And how is something a scam when you as the customer are following the rules dictated by the telecoms themselves?

      Methinks dcj001 works for a non T-Mo telecom.

    • Budiphl Laiphe

      @dcj001 you are a shill or you are not mentally capable.

      Matthew Taylor is 100% right about T-Mobile’s policy. His advice is not hacking. It’s the truth. You don’t need to give them your new phone. T-Mobile will take your old phone. GSM or CDMA. Doesn’t matter. They told me this info at the T-Mobile store even. They don’t hide it. They want to steal you from other carriers.

      The fact that Matthew Taylor figures out the details of a deal out only means he is a savvy consumer. Buyer Beware, right? Matthew sharing it with other means nothing as people do that all the time. Advice is all over the internet. Again. Buyer beware. All advice isn’t good advice. Matthew’s advice, though, is sound advice. What’s wrong with informing other consumers? If a company offers a deal, it’s fair game to take full advantage. Why take only partial advantage of a deal?

      Guys, check with your current carrier to find out the ET Fee’s and compare with T-Mobile’s offering. Trade in any old phone that works. Ask relatives and friends if you don’t have one. People always have old phones lying around. Do your research with several carriers. Also, find out what the coverage is in your area. T-Mobile is good in my area. Sprint was just bloody awful in my area so I’m changing to T-Mobile. T-Mobile has better reviews from people in my area. Sprint has dropped calls, slow network speeds, incorrect time stamps on messages, and they pushed selling me a LTE phone when they didn’t offer LTE in my area, but still charged me for LTE speeds. That’s dishonest. We’ve complained many times to Sprint and nothing has changed. They even said they did upgrades to the tower near my home, but nothing has changed. I could give you a dozen other examples of how cellular carriers ripped me off over the years, but that’s too much. You’re a fool if you don’t know how dishonest carriers are.

      You don’t have to be phony and stand up for cellular companies or phone hardware companies. They make tons of money. If they offer a deal and people take full advantage of that deal, that’s their benefit. They will make money if you are their customer. Period. They don’t care how you become their customer, they just want to switch you over. There’s only so many fish in the sea.

      dcj001, you need to find another hobby because you sure aren’t hitting the mark on internet commenting. Seriously, what is your deal? You are a shill perhaps. Just a curious position for you to take and with little to no facts backing up your claims while attacking someone that is serving the public trust.

  • Wow, well expect THAT loophole to close with a clang after this…

  • paekjons

    A guy at the AT&T store told me to use a third party unlocking site, which cost me about $25. This worked, and my wife is using a phone my parent’s purchased with one of their upgrades on T-Mobile. Again, this came directly from an employee who has done this many times with different phones that he would send to his relatives in India.

    • claytonkimball

      Do you recall the unlocking site you used?

      • paekjons

        gahh i don’t remember….

      • paekjons


  • Joe

    If u want T-Mobile to pay your early termination fee u need to trade in a phone ( it could be the phone that u got from att,verizon, sprint for which you will receive some money or i could be a $20 phone from Radishark and then buy a phone fhone from TMobile ) if u do t wabt your early termination to be paid off u can. Use your old phone if it can be use on TMobiles network

  • One of the most interesting and useful articles I’ve seen on cult of mac lately, bravo!

    • Matthew Taylor

      Thanx DJ!

  • Daniel Smith

    Actually when I moved over to T mobile they accepted ANY phone. Like literally. I gave them a broken feature phone and they allowed it. No checking no nothing. Keep your existing phone, get it unlocked after the fact, and buy one of their cheapest phones. I recommend the Lumia 520 windows phones, they actually work quite well, and you will have a backup phone if your nice one ever bites it. This article is too overly negative.

  • Good article.

  • Mark Serbin

    Got my 64 gig 5s from Apple web the night they went on sale. I got the T-Mobile sim model. I had ATT place a sim in it and I used it on ATT for about 3 months. The phone cost $905 with tax. When my ETF hit $60 I moved it over to T-Mobile on a $30 a month pre pay plan. I gave up my grandfathered unlimited plan that was costing $80 a month that had a BS 64 cent a month Admin Fee. Now I get unlimited text, 5 gig of LTE speed and 100 minutes talk for $30 total. I figure that the phone will cost me $0.00 after about 16 months. My 32 gig 4s is now my new iPod touch, so to speak. For me this was a win-win,

  • Sanul Raskar

    Hey, i was thinking to buy iphone 5c under the contract with AT&T of 2 years. can i request att of traveling to india and unlock my iphone within a period of weeks…..plz help & advice me…..

  • Ani Wiz

    So I was reading the FAQs on this on Tmobile website and one of it says – “Then, when they get their final bill listing their ETF amounts, they simply send it to T-Mobile or submit it online at, and within 8 weeks they receive a prepaid MasterCard covering their ETF amount up to $350 per line. The amount paid will not be more than the ETF amount the customers’ previous carriers charge for the type of device traded-in.”

    I’m worried about the last sentence which says they would pay only for the amount typically charged for the device type traded in. Any thoughts or experiences with this?

  • Cary M

    Matthew. I’m glad you took the time to write this article out. Strange enough, I had been thinking of doing this for some time. I even had a lengthy discussion with a TMobile rep who said this would work too. –
    “You: so originally you said the phone would have to be GSM(sim card) and unlocked(not under contract). So if today if I bought a new phone with AT&T, and switched in an older phone, bought a cheap phone with you, and waived the ETFs, could I use the phone that I just bought with AT&T and use it on your network??
    You: would that new phone be “locked” because I just bought it under contract? Or would your ETF waiver take care of that and “unlock” me, so to speak?
    Rep: In that case, as soon as you have paid your final ETF on the phone under AT&T, you have the option to call them and unlocked that phone. Additionally, you can use our service using your unlocked phone as long as they have the same SIM card with the new phone that you will be purchasing with us.”

    Hence, I made a little google search to make sure other people had success with this. Sounds like a good deal to me.

  • Cary M

    My brother and I have a bill with AT&T, but we are both out of contract now. I wonder if it would be easier to stop with AT&T, start a new contract with new phones(probably iphone5s) at Verizon, and then immediately switch to Tmobile for the ETF promotion, although this seems very risky and we might run into some unknown complications down this road…

  • Bob Johnson

    Or you could get a family plan and buy five subsidized phones, and do the hack with all five, sell them on ebay for $300-400 more than you bought them, cancel service on TMo, being that it’s no contract, and you end up profiting around $1500

  • Cary M

    Well. it looks like I just debunked this article.

    I just looked at the legal terms ( of AT&T’s contract and it looks like they force you to give back their subsidized phone or make you pay the difference.

    – “However, you agree to pay AT&T for all fees, charges, and other amounts incurred and owed under your Agreement, and you agree to return to AT&T any Equipment you purchased from AT&T in connection with your Service Commitment. If you fail to return this Equipment, you will be charged the difference between the amount you paid AT&T for the Equipment and the amount you would have been charged for the Equipment had you not agreed to a Service Commitment. AT&T also may charge you a restocking fee for any returned Equipment. Some dealers may impose additional fees.”

    The only sweet part of this deal was picking up a subsidized phone and taking it over to TMobile for their monthly rates, and it looks like that isn’t going to be possible. If somebody can provide me with a glimpse of hope that this isn’t the case then I’m all ears but it just doesn’t make sense to me. If you could keep the phone after paying ETFs, you would simply be making an easy profit. For example, if you bought a $99 iPhone 5s unsubsidized and decided to breach contract and pay $350 ETF would you expect them to let you go with a $700 phone? I don’t think so.