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Ending a Contract Early

Phone Insurance & Warranty »

Your cell phone agreement is a legal contract, obligating you for two years. While there are some ways out of it, all involve some degree of hassle. Our best advice, for those about to enter a contract, is to take steps to minimize the likelihood that you'll need to get out of your contract.

Before you Sign & During the Trial Period

  • Reception issues are unique to each person — nobody else will know if the service is going to work in your kitchen — so take advantage of the carriers' two-week trial period to make sure the service works everywhere you'll need it. If you need to cancel during that period, you will only pay for service used (no contract termination penalty.
  • If you have a planned change coming up in your life (e.g., moving, getting married, or new job), what you need from your cell phone and/or service may change dramatically. Consider a prepaid, no contract plan until things get settled.
  • Set aside $10 or $15 a month toward a new phone. Two-year contracts give you that much more time to lose your phone or desire an upgrade to a more current model. Since replacement phones are much more expensive than the discounted or free one you get for signing up, this is a way to minimize the impact should you want or need to upgrade halfway through your contract.
  • Review the prospective carrier's termination fee schedule. During 2008, in response to competitive and governmental pressure, most major carriers introduced prorated termination penalties.

Termination fees of the major carriers are as follows:

  • AT&T: $175, goes down $5 each month
  • T-Mobile: $200 for first 18 months, $100 for next 3 months, $50 for final 3 months
  • Sprint: $200, no proration
  • Verizon: $175, goes down $5 each month

As of June, 2008

During the Contract

Try a contract trading site such as CellTrade.

Take advantage of one of these escape routes, if applicable:

  • Your carrier makes a material change to the terms of your contract. Note that your carrier may not see a change as material, so you might have to fight for this.
  • You move somewhere not served by your current carrier. Most carriers are national now, so this is less common now. The worst case is moving to somewhere your carrier has service, but you experience worse reception than you had at your prior address. It is very difficult to get released from a contract in that case.
  • Make an excessive portion of your calls outside the carrier-owned portion of your calling area. In this case, your carrier may cancel your contract. However, finding these locations, and making sure they don't actually incur roaming charges for you, is probably more trouble than it is worth.
  • Die — This is not a recommended approach.