Should You Switch Cell-Phone Carriers?

It seems that cell-phone service providers are particularly eager to get your business given the abundance of incentives they're currently offering to consumers who switch carriers. Consider some of the tempting offers from major wireless players AT&T, Sprint, T-Mobile and Verizon.

AT&T is offering a $100 bill credit for every wireless line you add with the company by March 31. And it's lowered its monthly rates on no-contract smart phone plans -- likely to lure customers who already own phones and are coming out of two-year contracts with other carrier (and to discourage its current customers from defecting).

Sprint is giving away a Samsung Galaxy Tab 3 to customers who sign up for its new "Framily" plan, a mash-up of the words friends and family that lowers your monthly rate as you add more lines. It also is offering $100 savings on select phones if you switch to Sprint.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

T-Mobile will pay your early termination fees if you leave another carrier before your contract is up and switch to T-Mobile. And Verizon is offering a gift card worth at least $100, but up to $300, when you trade in a smart phone and activate a new one.

So with all these special offers wireless carriers are dangling, should you switch and snatch up these deals while you can? To help you decide, here's more in-depth examination of these offers and a rundown of the rates these carriers typically charge. The carrier and plan that's best for you will depend on the number of lines you have, the amount of data you want and the coverage area you need.

AT&T. To take advantage of the $100 bill credit, you don't have to sign a two-year contract if you add a line with the company for a phone you already own. However, you must maintain service with AT&T for 45 days to receive the credit, which will post to your bill within three billing cycles. If you switch to AT&T from T-Mobile, you'll get a $200 credit, according to an AT&T customer service representative.

AT&T also lowered its monthly service fee February 2 for smart phone customers without a contract. If you sign up for a two-year contract (to take advantage of a free phone offer), you'll pay $40 a month for unlimited talk and text service and an additional $20 to $275 depending on the amount of data you want for Internet access, e-mail, video and music streaming. Without a contract, you'll pay $25 a month for wireless service if you get 8 GB of data or less, or just $15 a month if you choose to have 10 GB of data or more. So the monthly rate (not including taxes) for no-contract wireless service with a 10 GB data plan would be $115, versus $140 for the same plan for a smart phone with a two-year agreement. For each no-contract line you add, it's an additional $15 or $25 a month, depending on your data plan.

AT&T provides 4G coverage in all 50 states, according to its service map. However, its coverage is limited in a few of the Midwestern and Western states.

Sprint. To receive the free Galaxy Tab 3, you have to sign up by February 27 for the "Framily" plan in a Sprint store and commit to a two-year service agreement. To get the lowest rate under the plan -- $25 for unlimited talk, text and 1 GB of data -- you have to have seven to ten lines. You're not limited to family members, though, to take advantage of the plan. You can invite friends to join, and they'll get separate bills. To get more data, you'll pay $10 per line per month for 3GB or $20 per line per month for unlimited data.

The monthly service rate is significantly higher if you have fewer lines. For example, if you had just two lines and unlimited data, you would pay $100 ($50 per line) plus $40 for data ($20 per line) -- bringing the monthly total to $140, which is the same as you would pay for two no-contract lines and 10GB of data with AT&T.

Sprint's 4G coverage isn't nearly as widespread as AT&T's or Verizon's -- especially in the West.

T-Mobile. If you have a contract with a wireless carrier, you could pay as much as $350 to break it. To get you to switch to its lower-cost plans, T-Mobile will reimburse your termination fees -- up to $350 per line. You must send your final bill from your former carrier showing the fee, then you will receive a prepaid MasterCard within eight weeks from T-Mobile covering the fee amount. And if you trade in your old smart phone for a new one, T-Mobile will give you a credit of up to $300 to apply to a new phone.

Individuals pay $50 a month for unlimited talk, text and 500 MB of data; $60 for 2.5 GB of data; or $70 for unlimited data. You'll pay an extra $30 for a second line, and $10 for each additional line. So for two lines and unlimited data, you'll pay $100 a month. There's no contract with the T-Mobile Simple Choice Plan, so there are no early termination fees. T-Mobile also doesn't charge fees for using more than your allocated data. Instead, it slows your data speed from 4G to 2G once you've used your monthly data allotment.

With 4G coverage in 41 states and just a few cities in some of those states, T-Mobile's coverage area is more limited than AT&T's and Verizon's.

Verizon. To qualify for the $100 Verizon gift card, you must trade in an old smart phone for a new 4G LTE smart phone and commit to a two-year contract. Depending on the value of the phone you trade in, you may qualify for a gift card worth up to $300, which can be used to buy Verizon wireless products or to pay your bill. Verizon also is waiving its $35 activation fee for a limited time.

Verizon did have a limited-time offer of unlimited talk, text and 250 MB of data for $45 a month. But it just introduced a new "More Everything" plan, which claims that you get two times the data for the same low price. With the new plan, unlimited talk, text and 250 MB of data for a smart phone is now $55 a month. With each line you add, it's an additional $40 a month for talk and text, plus $15 to $375 for data. So two lines with 10GB of data would cost $180 a month -- $40 more than a similar AT&T or Sprint plan and $80 more than a similar T-Mobile plan.

Verizon's 4G network covers all 50 states. It claims to have the largest 4G network, with coverage for 97% of Americans.