Is T-Mobile's contract swap incentive worth it?

Don't Waste Your Money

If you're a Sprint, Verizon or AT&T customer, T-Mobile is trying to entice you to break your contract and jump ship.

But is it worth it?

As an incentive, T-Mobile is offering to pay the penalty fee -- up to $350 -- for every line you switch. But Consumer Reports experts say this offer is not as easy as it seems.

"When the early termination fee appears on your bill, you have to turn it in to T-Mobile for reimbursement,” said Mike Gikas of Consumer Reports. “So you actually have to pay that money up front."

Gikas said there’s also another step: You have to turn in your old phone.

"You do have to buy a new phone for every line you switch, so that's an expense,” he said. “And if your credit rating is less than stellar, you'll have to pay more up front for each phone." 

But T-Mobile will ease the pain with a credit for the phone you turn in, up to $300.

How much will they pay for your old phone?

T-Mobile will pay you about $100 for an iPhone 4S and about $160 for a Samsung Galaxy.

"What T-Mobile actually pays will depend on the phone and the condition it's in when you turn it in,"Gikas said.

Finally, when choosing your plan, T-Mobile promises "all plans come with unlimited talk, text and Web."

But watch out: With the lower-cost plans, you only get so much data before the speed slows down. 

Still, there could be a reason to switch.

"We've crunched the numbers, and in most cases, T-Mobile's rates were cheaper than those from AT&T, Sprint and Verizon,” Gikas said.

And if you're wondering how satisfied T-Mobile customers are, the latest survey of Consumer Reports' subscribers found it was one of the better major providers in many cities.

If you're planning to turn in an old phone, Consumer Reports experts say you should wipe it clean of personal data with a factory data reset. You can find step-by-step instructions on that here .

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