How to Switch Your iPhone From AT&T to Verizon… for Free!

If you’re an iPhone 4 owner like me, you’ve been eagerly anticipating the Verizon iPhone: a mythical device with all of the features of the gadget you love, but one that can also make phone calls. Unfortunately, AT&T locked you into a two-year contract with a hefty $325 cancellation fee (minus $10 for each full month of service you’ve completed). Since the iPhone 4 was released on June 23, 2010, the earliest that anyone with a two-year contract can cancel without paying that fee is June 23, 2012. That’s too far away!

Fortunately, I’ve figured out how you can switch your iPhone from AT&T to Verizon for free. In fact, it’s possible you’ll actually come away with an extra $295.

Step 1: Pay the cancellation fee

But wait… This article was supposed to tell me how to switch my iPhone to Verizon for free, and step 1 is to pay the cancellation fee!? Yes, it is. There’s no way around the contract you signed with AT&T. If you want to drop their service, you need to pay up. If you received your iPhone 4 on the day it was released, your cancellation fee today would be $255 ($325 minus $10 for each of the seven months of service you’ve had it).

Step 2: Buy your new iPhone 4 from Verizon

Now you want me to spend even more money!? Yes, I do. A 32GB iPhone 4 from Verizon with a two-year contract costs $299. Pay that, and your total expense so far is $554. But now you have two iPhones. In my case, I’ll have my old 32GB iPhone 4 from AT&T that no longer has service but that I didn’t have to give back, and the new 32GB iPhone 4 from Verizon that I’ve just paid for and activated.

[Note: Make sure you do steps 1 and 2 on the same day, at the same time, so you can transfer your old phone number from AT&T to Verizon.]

Step 3: Jailbreak and unlock your old AT&T iPhone

Believe it or not, there are literally dozens of square miles around the globe where Apple doesn’t sell iPhones. But they’ve done such a great job marketing that the people living in those places still want them – and they’re prepared to pay a premium price for the item they can’t otherwise acquire. That’s where you come in.

Jailbreaking and unlocking your iPhone involves updating the software on your phone with a modified version that allows the phone to work with any GSM SIM card. In non-tech speak: The phone will work on more networks than just AT&T. Networks in other countries. Other countries where iPhones aren’t sold. And where iPhones aren’t sold, people pay up.

[Note: To find out exactly how to jailbreak and unlock your AT&T iPhone, read my other article: How to Jailbreak and Unlock Your iPhone.]

Step 4: Sell your old, but newly unlocked, AT&T iPhone on eBay

A quick, unscientific look at eBay will show you that a jailbroken and unlocked iPhone will sell for at least $100 more than its off-the-shelf brothers. In fact, as I’m writing this, I’m looking at a used, jailbroken and unlocked 32GB iPhone 4 (exactly like mine) that sold for $849 on eBay just a few hours ago.

Take that $849 and use it to offset the $554 that you’ve spent paying the AT&T cancellation fee and buying your new iPhone from Verizon. And voila! You have a brand new iPhone 4, activated and working on the Verizon network with your old phone number, and an extra $295 in your pocket.

But since the Verizon iPhone doesn’t come out until Feb. 10, you’ll just have to thank me later.

[Note: If you have a 16GB iPhone 4, the math will still work out. Jailbroken and unlocked, it'll sell for $100 less on eBay, but your new one will cost $100 less to purchase from Verizon.]

Sign up for our free newsletter

Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free! We'll also email you a PDF of Stacy Johnson's '205 Ways to Save Money' as soon as you've subscribed. It's full of great tips that'll help you save a ton of extra cash. It doesn't cost a dime, so why wait? Click here to sign up now.

The fast, free way to stay on top of your money.

If you’re not using online money management, it’s time to start.

Click here to find out more.

Money Talks News has teamed with PowerWallet for a free, confidential way to track your expenses, set budgets and goals, get bill reminders and earn free customized coupons.

Take a minute right now and check out PowerWallet. It's the simple way to get a handle on your money.

Comments & discussion

We welcome your opinions, but let’s keep it civil. Like many businesses, we reserve the right to refuse service to anyone. In our case, that means those who communicate by name-calling, racism, using words designed to hurt others or generally acting like an uninformed bully. Also, comments that include links to email addresses or commercial websites typically aren't posted. This isn't a place to advertise your business.

  • http://twitter.com/kingofkingz33 Rob Sukiasyan

    this misses the big point where its not currently possible to unlock the iphone 4 on any recent firmware

  • http://twitter.com/annaltauzin Anna Tauzin

    How about getting screwed by Paypal customers? Someone buys your working iPhone 4, tells Paypay that it does not work and will send it back to you. Problem is that they do a switcheroo and you get not your iPhone, but one that really does not work. Paypal has reversed the transaction, you have no money and a broken phone. Good luck.

  • http://pulse.yahoo.com/_P43PKX6P4WBWB3EDWAUPDDHYJY kabuli

    [Note: Make sure you do steps 1 and 2 on the same day, at the same time, so you can transfer your old phone number from AT&T to Verizon.]
    If you are transferring a number, by all means DO NOT CANCEL the original account with the number you need. You cancel the original account when the number is done transferring (well, actually, in most cases the account should close automatically, but it may not, especially where an ETF is involved). If you cancel the service before the number transfer request has been initiated and completed, you may LOSE the number!