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Phone early termination fees: How to know what you'd owe

Sprint ETF page

Most of us know someone who is completely obsessed with all things Apple. It's the friend who carries her iPad everywhere or the coworker who named his turtle after Steve Jobs. These folks (and a lot of others, too) have been waiting with bated breath for the iPhone 5. But if you're debating ditching your current cell phone contract to snap up Apple's latest confection, make sure to do your homework first. Unless you have a prepaid plan, you can expect to pay hefty fees for cancelling your contract before its official end date. 

Exact amounts will vary depending on the device in question and how much time is left on your contract. Here's a quick look at major cell phone carriers' early termination fees.

The outlook for an early out
The setup of early termination fees is similar for Verizon, AT&T, Sprint, and T-Mobile. If you've had your contract for longer than the company's initial return policy (usually 14 or 30 days), you'll probably be charged between $50 and $350 for terminating it early. Contracts for so-called advanced devices (think smartphones, tablets, and netbooks) cost more to terminate than contracts for standard devices. 

If you just began your contract and want out, you're in luck; most carriers let you terminate your contract within the first two to four weeks after activating without termination fees. In this scenario, though, you have to return the device to the cell phone company and pay a restocking fee of $25 to $75, depending on how much the item originally cost. If you duck out of the contract within the first three days, many cell phone carriers will reimburse the activation fee you paid to set up the line, but you'll still have to pay for any usage.

Verizon's early termination fee is $175 for standard devices and $350 for advanced devices like smartphones. Like AT&T, T-Mobile, and Sprint, Verizon gives you a discount based on how many months of the contract you've fulfilled. For each month you've fulfilled in your cell contract, the ETF you'd pay to cancel goes down by $10 for an advanced device, or $5 for a standard device.

You'll take a little bit less of a hit if you terminate your contract immediately after you start it. You can end your contract for any reason during the first 14 days, but you'll have to return the device, for which you'll pay a $35 restocking fee ($70 for netbooks and tablets).

One small piece of good news: If you pay full price for a new device, Verizon will let you activate service without a contract. The unlocked iPhone 4S isn't cheap (it starts at $649), but if you're a cell phone carrier commitment-phobe, the full-price, no-contract option might be worth looking into.

The cost of ending an AT&T contract early is almost identical to Verizon's: $325 if you're using an advanced device, $150 for all other devices. AT&T also gives you a break for every month of the contract you completed before terminating. Cancelling the contract for an advanced device will set you back $325 minus $10 for each full month of the contract you completed; non-advanced devices get a $4 discount for each full contract month before the cancellation.

If you signed at AT&T contract before June 1, 2010, you're in luck though: your ETF, even for a smartphone device like the iPhone, will only be $175 minus $5 for each month of service you've completed. That's because the company effectively changed their early termination fee policies on that date to reflect the higher ETF for smartphone devices, so if you're in under contract before that date you're still subject to the original, lower ETF policy.

If you just started your AT&T contract, you have 30 days to cancel the contract without penalty, although (as always) you'll have to return the device and pay any usage fees you've incurred. AT&T's restocking fee is $35 for all devices except tablets and Apple devices; those will cost you 10% of the device's price to restock.

T-Mobile doesn't distinguish between advanced devices and standard devices when calculating early termination fees; the only factor is how much time is left on your contract when you cancel. Early cancellation fees range from $50 if you have one to three months left on your contract to $200 if you're under still contract for six months or more. If you cancel your contract during the last month, you'll pay either $50 or your monthly recurring charges, whichever is less.

T-Mobile gives you a 20-day window after starting your contract during which you can back out without being hit with early termination charges. Restocking fees for returned devices vary; you'll pay $75 to restock netbooks and tablets, $50 for smartphones, and $25 for basic phones.

Like the other carriers, Sprint gives you a bit of a break on early termination fees based on how many months of your contract you've fulfilled. You can calculate what your ETF would be by taking the number of months that remain in your contract and multiplying by $20 for an advanced device, and $10 for a standard device — with a maximum ETF of $350 for advanced devices and $200 for standard devices, and a minimum ETF of $100 and $50, respectively. Here's a quick example: If you cancel a contract on an advanced device and there are 22 months still left on your contract, it'll cost you $350, because 22 x $20 is higher than the maximum $350. If you cancel with 10 months left in your contract, you'll pay 10 x $20 or $200. But cancel the same device when you've just got one month left, and the termination fee drops to $100 — the minimum ETF for a smartphone device. Sprint has published a handy chart so you can see what your ETF will be at a glance.

If your contract is brand new, Sprint allows you to up to 14 days to cancel without early termination fees, provided you return the device and pay for any service you've used. But you'll still be charged a $35 restocking fee unless you're returning a device that was never activated.

Still not sure how much you'd have to pay to cancel? Check out our handy early termination fee calculators!

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