AT&T Next vs T-Mobile JUMP vs Verizon Edge: Verizon and AT&T have followed T-Mobile's lead and introduced early-upgrade programs. These programs may seem to satisfy our need for the newest iPhone or flagship Android phone every year, but which is the best, and are any of them a good deal compared to a prepaid plan?
AT&T Next vs T-Mobile JUMP vs Verizon Edge
The basic idea of these plans is the same: you pay a little more on your monthly bill and in return you can trade in your phone (in good working condition) and upgrade earlier than you could with a traditional 2-year contract. There is no down payment with any of these plans, and you will pay the full price of your phone over 20-26 interest-free monthly payments. T-Mobile's plans already work this way. In the chart below I used $650 as the price for a phone, the price of a new iPhone or high-end Android phone. The total 2-year price calculated in the chart includes one upgrade and 24 months of phone and service payments.
With Verizon Edge you'll get a discount of $10 per month off your monthly bill for plans with up to 8GB of data, and $20 off for plans with 10GB or more. You are eligible to upgrade anytime after 30 days and your phone is at least 50% paid off.
There are two AT&T Next plans with different upgrade times. They make AT&T's already expensive plans even more expensive. Essentially you're paying double for your device - once with the monthly payment and again with the high cost of their monthly plans.
T-Mobile already separates out the costs of its plans and phones, so the additional $10 fee for their early upgrade program makes sense. They also include device insurance with JUMP, making the fee more palatable. You can trade in your old device and upgrade at any time. If your phone isn't at least 50% paid off, you'll have to pay the difference at the time of the upgrade.
Which is the best early upgrade program and how do they compare to a prepaid plan?
T-Mobile JUMP is the best deal for people looking to upgrade every year, but that's mostly because T-Mobile's service is already much less expensive than their rivals and the $10 fee includes device insurance. If you have good T-Mobile coverage in your area and already pay for device insurance, then there's no reason not to enroll in JUMP and get a new phone every year.
Verizon EDGE isn't quite as good of a deal as T-Mobile, but it's not a terrible deal for someone that needs Verizon's coverage and doesn't want to deal with the hassle of selling a used phone every year.
I used a $45 prepaid plan (see our overview of the best prepaid plans here) and a $650 phone as an example in the chart. I assumed the old phone would be sold for $400, a conservative estimate for a year-old iPhone on eBay or Craigslist, but more than you'd likely get with an online trade-in service. The 2-year price is similar to T-Mobile. A prepaid plan such as the $45 plan from Straight Talk that runs on AT&T's network would be a much better option for someone who wants AT&T's coverage than the AT&T Next plans.
These early upgrade plans usually aren't a good financial decision. You'll likely be better off buying a new phone at full price every year and selling your old phone. However, if you don't feel comfortable selling your old phone, T-Mobile's JUMP plans are the best deal and come with some nice extras.