How Much Can You Really Save by Switching Mobile Carriers?

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Are you eyeing Apple's (AAPL) new iPhone 6? Me too. Problem is, I'm 11 months into a 24-month contract with my current carrier, AT&T (T). If I upgrade now, I can get a new phone for $299 ... and another 24-month lock-up period.

Let's consider my alternatives. I took a look at my last few billing statements to see how much data texts, and call minutes I've been using. I would have described myself as a moderate data user and a low-volume caller and texter. I was right on the latter two categories -- I was being charged for less than a dozen texts per month and an average of 90 minutes per month in calls.

What shocked me was the data -- I'm using an average of just 400MB per month. I read and send email on my phone constantly and frequently click through my favorite apps, so how could I be using so little data? Turns out I'm nearly always using my phone with Wi-Fi, which I have access to at home, work and apparently, nearly everywhere I spend any significant amount of time.

Unlimited Data Didn't Matter -- for Me

I've been clinging to my legacy unlimited data plan at AT&T for years, believing it was a rare gift. Turns out, I'm barely using it.

Next, I checked what I'll owe in early termination fees if I cancel now -- a whopping $215. Ouch. Fortunately, all of the options I'm considering will soften the blow -- or wipe it out altogether. Sprint (S) and T-Mobile (TMUS) will cover early termination fees of up to $350, and Verizon (VZ) is offering a $150 credit to switch from another carrier. Most will also buy back my current iPhone, but I decided to leave that out of the calculations as I'm already comfortable reselling or trading in old phones.

Finally, I picked the phone I wanted: a gold 64GB iPhone 6. What can I say? I like a little bling (and plenty of storage).

Then it was time to compare. I don't have a landline, so I decided to stick with the four major carriers, all of which have strong coverage in my area. I know there's value to be had with the myriad of discount carriers out there, but I feel better with a brand name.

I first considered the cost to upgrade under my current plan when I'm eligible next month. Then I turned to my carrier's competitors. Based on my past usage, I considered plans with a minimum of 1GB of data.

All plans include 64GB iPhone 6; retail cost: $749.99CallingTextsDataUpfront
Cost
Monthly
Cost
Total After
24 Months
Current AT&T Plan450 minutes200Unlimited$299$81.71$2260.04
AT&T Next 24UnlimitedUnlimited1GB$45$75.00$1845.00
SprintUnlimitedUnlimitedUnlimited$49.50+ $36 activation fee$81.25$2035.50
T-MobileUnlimitedUnlimited1GB$109.99$77.08$1959.91
Verizon EdgeUnlimitedUnlimited1GB$0$91.24$2189.76

The good news is that all of the plans I looked at will save me money, and staying with my current carrier -- which I know has coverage where I need it -- saves me the most of all, albeit with a new data plan.

I quickly ruled out Sprint -- I found its information confusing -- and Verizon, which was my initial first choice, but not given the extra cost. That left AT&T Next 24 and T-Mobile. I like that T-Mobile's Simple Choice plan offers international data and texting at no extra charge -- a boon since I travel outside the U.S. for work and leisure two or three times per year. But is it worth more than $100 a year and the hassle of switching?

Just as I was set to make the final decision and order my new phone, my mom and sister threw a wrench into my careful calculations. What if we combined forces with a family plan instead? That could mean even more savings! So it's back to the drawing board for me.

So How Can You Save?

The most important thing to do is to get a handle on your actual usage over the past six months to a year, information which you should be able to get from your carrier. Nearly all the top plans are offering unlimited calling and texts, so focus on data. What's your average usage and what was your maximum use in a single month? That will give you a solid sense of what you really need so you can compare plans like I did above.

Make sure you're comparing all costs involved, including taxes, activation fees, and any up-front payments, along with all the terms involved, such as when you're eligible for future upgrades and what happens if you exceed your data limit. Then pick the winner and enjoy the savings!

Motley Fool contributor Robyn Gearey owns shares of Apple. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. Check outour free report on the Apple Watchto learn where the real money is to be made for early investors.
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