Since the first cell phone was tested in 1973 consumers have been fascinated with the concept of wireless communication. Nearly thirty years later, cell phones are an integral part of our lives with millions of consumers carrying one daily. Over the years the cell phone industry has see many changes. Phones have gotten smaller, smarter and more affordable. Devices come in different shapes and sizes with capabilities far beyond their predecessors. Today consumers have more options than ever before, including which cell phone service provider they choose. If you are looking for a more affordable service provider but are currently in a contract with another, you can change make the switch but it might cost you. Here we look at how you can deal with those expensive early termination fees (ETF).

  • Find out where you stand- Before you make any moves, call your current carrier to determine what if any ETF would apply if you were to cancel your contract. The major cell phone service providers like AT&T, Sprint, T-Mobile and Verizon Wireless all have a two-year contract period. If you have been with the carrier for more than two years you might be outside the penalty period meaning you can get out of the contract without paying the ETF. Some providers prorate the ETF over the entire two year period meaning you might owe some money but not the full amount.
  • Read the fine print- Carefully read each bill including any new changes initiated by the cell phone provider. In some cases you can avoid an ETF if you opt out of contract changes made by the provider. They aren’t going to volunteer information that will negate your current contract, so you must carefully read all correspondence from you carrier to spot changes in your contract.
  • Avoid temptation- Once you are outside of your two year contract period, many cell phone service providers offer free phone upgrades, increased minutes or other features that might tempt you to renew your contract. Understand that once you accept whatever offer they are presenting, you are now under a new two year contract which brings with it another ETF.
  • Crunch numbers- Sometimes it is simply more cost effective to pay the ETF. If you are switching to a carrier that offers a much lower price per month, it might be worth it to pay the penalty in order to gain the savings a few months down the line. Compare how much money you will save by switching to determine if it is the right time to get out of your current contract.

Early termination fees are so costly to deter consumers from switching carriers. Consumer Action and TRACFone are urging consumers to carefully weight the pros and cons of paying an ETF before making a switch.  Everyone is looking for ways to save money and it might just be worth it if you can cut your monthly cell phone bill in half by breaking your current contract.  By following the tips provided here you can make an educated decision on which path is right for you.