How to Affordably Cancel Your Cellphone Contract

There Are Ways to Get Out of Your Cellphone Contract

Close-up of ?No mobile phones? sign
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Financial hardship can happen to anyone, whether it's because of an economic downturn, job loss, or even costly unplanned medical issues. What happens if you’re under contract with your cell phone carrier and you need to cut costs?

How can you reduce or even break your cell phone contract without incurring large fees?

Early Termination Fees

You can typically downgrade your plan easily online or with a call to your service provider and lower your monthly bill.

However, most people have contract plans that lock them into a service term period.

To discourage customers from jumping cellphone ship, contracts usually include some form of early termination fee. These fees are often extremely high. These fees are one of the biggest reasons that no-contract and prepaid cell phone plans continue to gain in popularity.

The argument cellular service carriers make in favor of early termination fees is that they are necessary to help the companies recoup their costs for subsidizing cell phones that allow you to buy them at a lower price when setting up service. 

Opposition to Termination Fees

Consumer interest groups on April 21, 2009, requested that major cell phone carriers waive the exorbitant and universally loathed early termination fees for those consumers who have lost their jobs. The Maryland Consumer Rights Coalition and the National Consumers League both sent letters to Sprint, Verizon Wireless and AT&T on behalf of consumers protesting the standard U.S. policy of early termination fees.

While most carriers have been unwilling to eliminate early termination fees entirely, major carriers have granted consumers the right to have such fees prorated, so penalties are based on the time remaining in a contract.

Selling or Transferring Your Cellphone Contract

Instead of paying your carrier a stiff fine to break a contract, there is the option of trading or selling your contract to someone else.

Various websites help you do this for much less than it’d cost you to terminate early.

CellTradeUSA.com offers a service to transfer a contract (to “get out”), as well as the ability to take over someone else’s contract (to “get in”). The company supports Sprint, AT&T, Verizon Wireless, T-Mobile, Cricket Wireless, U.S. Cellular and others. CellSwapper.com is another service similar to Celltrade.

There is usually a small fee you'll have to pay to unload a contract through these services, but it is likely a fraction of what you would pay for in early termination fees.

Ask Your Carrier About a Hardship Policy

If you can’t get out of your contract or don’t want to try to sell or transfer it, call your cell phone company and ask them to help you lower your wireless bill. If you’ve recently been laid off or you’re in a dire financial situation, ask about its “financial hardship policy.” Your cell phone carrier could lower your bill outright, help you downgrade some of your services or grant you a more lenient payment plan.

You might be surprised how effective one call can be.

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