Getting Out Of A Cell Phone Contract By Giving It Away

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Want out of your 2-year contract early? Already tried the conventional methods of smooth-talking or catching them changing your contract? The next step may be to simply give it away.

At least that’s what the author of this Wall Street Journal article How to Dump a Cellphone Contract did. Apparently most carriers allow you to transfer your contract to another person, as long as they pass a credit check. To find a potential taker, the options range from sites that charge $20 like CellTradeUSA and CellSwapper, to the free sites Craigslist and FreeCycle. Thanks to KG for the tip.

It’s not quite as easy as it sounds… you will likely have to offer to either swap contracts or include your phone as an incentive. You’ll also lose your phone number. The author threw in her phone, a bunch of accessories, and $50 cash, which I guess is understandable as her contract had over a year left on it.

The winner? FreeCycle. In one day! I don’t know if they just got lucky, but it would seem prudent to use the free sites first. The pay sites entice you by dangling a bunch of communications from potential swappers, but you can’t get their info without paying.

This is what I’m wondering – if you already fulfilled your contract, wouldn’t that potentially be worth some money? Another user could simply hop on and go month-to-month. They wouldn’t get a discounted phone, but it’d be cheaper than most prepaid plans. Maybe I should have tried selling mine before jumping ship to Sprint SERO

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  1. I don’t think so – I think of contracts more like debts. You are indebted to pay a certain amount of money over an extended length of time. If are in the middle of that term and you want someone to take over the debt then, yeah, you will have to make it worth their while. But once you are all paid up then then its not like your accounts starts to have positive value.

    Or to think about it another way, and person can sign up with sprint, verizon, t-mobile, etc on a month-to-month basis and get the exact same rates as a contract customer. They just won’t get the discounts/free phone, etc. Same thing as what you are suggesting.

  2. Yeah but we just dumped our old phones with Verizon that had a cheaper monthly plan than they even offer today AND they still honored off-peak hours starting at 8pm (they long ago switched it to 9pm, which is why we hesitated switching for so long). A month-to-month contract on an old contract could be a great deal.

    I doubt they would let you sell that though. Interesting question.

  3. Same thing can work with car leases – you want out, so you transfer the lease to someone, often with a cash incentive. Sometimes, just the fact that you paid an fee on the lease upfront is enough to make it attractive to the next guy. Also, if you have a ton of miles remaining towards the end, sometimes people (like salespeople) like to pick up cars with, say, six months and 10,000 miles on the lease. Similar sites do the swaps – can’t remember the names.

  4. Some companies always renew your contract every time you make a change to the plan. May be that policy is applicable even to transfers. Once your contract is up, unless you plan on letting your friend use it month to month an official transfer to some stranger will almost renew/extend the contract for that person.

    Although, you do have an interesting point if that works. Help others get a discounted plan rate and no committments.

  5. Jerry Michaels says

    I just moved to New Jersey. I read a similiar articel on in the WSJ a few months ago. After calling my provider “Verizon Wireless” to tell them that I have no service in my new town in New Jersey they told me that I was still in a contract because they had service in NJ just not in my town. AT the time I decided to give celltradeusa a try. I joined for free and waited. I received a few responses pretty quickly so I paid the fee to unlock the messages. 2 of the 3 people that wanted it didn’t pass credit check and the other didn’t respond. Now that I paid for the service I decided to get pro active. I posted my ad on and craigslist directing them back to my celltrade listing. I ended up passing it off to a fella I met on NJville Took a little bit but it was absolutely worth the effort. I now have my new phone that works in my new town 🙂

    I am a celltrade fan for life 🙂

  6. Credit Repair Forum says

    Sounds like a lot of trouble. I hate being trapped in a contract. The best advice is to do your research and make sure you are ready to sign a 1 or 2 year agreement. Don’t just jump into something like that.

    I used to sell cell phones. We would have people want out of their contract after a few weeks or so. I hated having to tell them that they were stuck for 2 more years.

    These people obviously made an impulse buy that they should have spent some more time thinking about.

  7. I had a Sprint contract for the past couple of years. I did this same thing a few months ago before contract would be up (this month actually), and gave my phone and contract onto another.

    I am happy I did this, and am now a very happy customer of a Net 10 prepaid phone. I’ll be saving over $300 a year on my phone expenses. That money will look alot better in my savings account 😀

  8. Hey Jonathan, I think you’re kind of right about the “paid contract being worth something”. The plans here in Canada just roll you into month-to-month, but the “deals” tend to come in waves. Twice in my cell phone history, I’ve found what is basically “the best plan available” and hopped on for a year or two. Even after that year, I still had the “best plan available”.

    In fact, I’m on one of those now. I signed up for Telus in Manitoba b/c they had these awesome “we want to break into this new province deal”. But I kept the plan when I moved to Alberta (Telus’s home turf) and they still can’t offer me a better deal than when I signed up two years ago.

    Of course, a note for the frugal cell phone users (here in Canada). If you want a “pay-as-you-go” cellphone here in Canada, all of the providers basically don’t want you and they shaft you with the worst deals. They’ll sell you airtime starting at $25 and then expire the air-time at the end of the month. Which will typically make it like $5-10 cheaper than “the plan”. They’re doing this on purpose, b/c they don’t really like “pay-as-you-go”, they don’t get the big bucks from these clients.

    However, there’s an exception: 7-Eleven Speakout wireless! The minute-cost rates are as good (or better) than the major providers and the minutes last 365 days from your last “deposit”. Not just 365 “total”, but from the last deposit. The reason I can suggest these guys is coverage. Normally in the US, it’s a big issue, but here in Canada, we’re really just focused around a few major cities and highways (with lots of open space). Sev has partnered with Rogers which basically covers all of the major spaces, so you not only get cheap minutes you also get excellent coverage.

    Obviously, it’s not for compulsive long-talkers, but for the “I want a cell phone when I’m out” crowd, this is the best thing going north of the 49th 🙂

  9. not so simple at all, because once you transfer, the new person assumes a new 1 or 2 year contract. they do not assume the remainder of your contract. whenever something in the contract is changed, the contract renews.

    rmed, although you will be saving from what you were paying, prepaid IS in fact more expensive on the whole.

  10. OK, Tim, you’re clearly going to have to back up this statement:
    not so simple at all, because once you transfer, the new person assumes a new 1 or 2 year contract.

    Because that’s in direct opposition to what Jonathan said: Apparently most carriers allow you to transfer your contract to another person. Given that Jonathan has lots of links with supporting information on the subject, you may want post up some links of your own to prove your point or you’re just blowing wind.

    The following statement is also made in a void: rmed, although you will be saving from what you were paying, prepaid IS in fact more expensive on the whole. and probably needs a qualifier or two.

    Apples to Apples: contract is inherently cheaper if you assume that you “max-out” your plan every month and use all of the features of your new phone. If you’re not using all of your minutes or you’re using a phone that’s more expensive than you need it to be, then you can extract this extra money by moving to prepaid.

    For example, my father has put up 36 hours on his phone over the last 3 years, that’s 12 hours/year or just about 1 hour/month. Moving to prepaid will save him some serious dough (that’s maybe $12/month in minutes), but the money he’s saving is actually just reclaiming the “extra” time that the cell company is basically charging him every month.

  11. I’m not understanding what you are trying to say. I was paying around $550 a year with sprint, now I’ll be paying about $180 with Net 10.

  12. Cellphone contracts can be a boon depending upon what you sign up for. Whether you like it or not, most of us will be using cell phones for life. It is better to sign up for a contract and get what you want. Postpaid plans offer way more bang for the buck than prepaid plans. Example Sprint SERO plans, AT&T wireless’ old plans etc. More important than money, pay close attention to coverage and customer service. Buying contracts is definitely a great idea if you already got a working phone especially a GSM phone: length of contract is smaller with all postpaid goodies!

  13. I have heard a rumor that if your cell phone company can’t produce a copy of the contract that you signed, they can only hold you to a 1 year contract. Verizon is saying that I have a 2 year contract with them, but they are unable to “locate” a copy with my signature on it. How do I enforce the 1 year contract minimum with Verizon since they can’t produce the signed copy? Thanks for the help and insight.

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