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.]
Subscribe by email
Like this article? Sign up for our email updates 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.