Worth it to pay a fee to upgrade your cell phone early?

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DENVER -- For years Verizon’s slogan has been, “New Every 2”, but the idea of waiting 2 years to get a new cell phone is changing.  3 out of the 4 major cell phone carriers have released new plans in the past few weeks that let users upgrade more often… for a fee.

T-Mobile Jump, AT&T Next and Verizon Wireless Edge all work in different ways but have the same basic concept.  You pay an additional fee on top of your existing monthly fee.  This fee is based on the total cost of the phone.  After a certain amount of time (6 months to 1 year) you can hand your phone back over to the cell phone store and they will let you upgrade to a brand new phone. The fee structure is reset and the cycle starts all over again.

Seems like a great idea for those gadget geeks who want the latest and greatest, right?

Rene Ritchie, Editor-In-Chief with iMore.com, said consumers need to be warned.

“They are not trying to be nice at all, it’s a complete con game.  It’s like a high end BMW lease.  They want you to pay twice for your phone,” explained Ritchie.

Ritchie said even though most companies won’t admit it, a subsidy fee is already built into your monthly AT&T and Verizon bill.  T-mobile makes it clear that a $20 subsidy is tacked on to subsidize your phone until it’s paid off.  Because of those fees, Ritchie says the extra fee for these new services essentially means you’re paying twice.

“They’re trying to jump start two industries.  They’re trying to jump start early upgrades and then do the secondary market to re-sale refurbished phones which is smart for them but sort of a money grab at the same time,” said Ritchie.

He says if you have the cash, buy the phone upfront and then find the best deal on cell phone service to go with it.  If you can’t afford to do that he thinks the existing 2 year upgrade model makes the most sense for consumers.

“Nobody needs to upgrade but if that’s not their concern , stick with the current plans.  Go with the best deal you can and avoid any value adds or whatever they try to offer you,” added Ritchie.

Out of the three new plans Ritchie says T-mobile Jump is the best deal.

If you do decide to go with one of these new plans, most experts agree you’ll get the best bang for your buck by upgrading as often as they will let you.  The longer you let it go, the more you’ll end up paying.

Find out exactly how each plan works directly from the cell phone companies:

T-Mobile Jump
http://explore.t-mobile.com/phone-upgrade

T Next
http://www.att.com/shop/wireless/next.html#fbid=HWPzLUBp5GD

Verizon Wireless Next
http://www.verizonwireless.com/wcms/consumer/devices/edge.html

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