T-Mobile's free iPhone 7 offer requires upfront costs and lots of patience

Matthew Miller wasn't planning to purchase any new iPhone 7 devices for his three daughters, but T-Mobile's trade-in offer sounded too sweet to pass up. Turns out, it's not a bad deal, but it's not exactly free.

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Image: T-Mobile

Thanks to a tweet from T-Mobile CEO John Legere, T-Mobile made an offer I just couldn't refuse.

My three daughters have been using second-hand iPhone 5 models for a couple years and were content to continue using them while also starting to consider Dad's hand-me-downs -- that is, some of the Android options I'm finished using.

T-Mobile stated I could buy a new iPhone 7 for free with an iPhone 6 trade-in. I wish I would have known about this before I sold my iPhone 6s Plus for a $400 loss.

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Since my daughters have older iPhone 5 models, I didn't think this offer applied to our situation. I then went to the T-Mobile iPhone offers website and found that iPhone 5, iPhone 5s, iPhone 5c, and iPhone SE owners could trade in their old working iPhone and buy a 32GB Apple iPhone 7 for just $250.

With the iPhone 7 32GB model starting at $649.99, T-Mobile is offering customers $399.99 to trade in an old iPhone 5 that has a value of less than $100. As a result, we decided to purchase each of them a new iPhone 7 for an early Christmas present since their iPhone 5 models are worth so little on the second-hand market.

As I went through the process, I learned several things that I hope will help some of you as you go through this with T-Mobile and other carriers offering a similar trade-in.

  • Can I buy a larger capacity model? Yes. For $100 extra, you can upgrade to a 128GB model, and for $200, you can upgrade to a 256GB model. You can go for the iPhone 7 Plus too, if you pay another $120 on top of the iPhone 7's price.
  • Can I trade-in a 6, 6s, 6 Plus, or 6s Plus? Yes. You get $649.99 credit for newer models.
  • Can I just pay $250 and be done? No. You have to buy the new iPhone 7 using the EIP (equipment install plan). The way this works is that T-Mobile will apply a credit each month to your account for 24 months. In my case, T-Mobile will apply about $16.67 to each line each month until the $399.99 trade-in value is met.
  • Can I pay off the EIP early? Yes. But you will not see the full value of the trade-in and will have to pay the outstanding balance.
  • How do I initiate the trade-in? Pre-order the iPhone as you normally would, and at the final confirmation page, note there is a trade-in option to click on. Enter the trade-in IMEI, model type, capacity, and color, and then walk through the wizard. You will get a shipping label to make the trade with a deadline date.
  • I was only offered $58 in the value calculator, what's up? This was the frustrating part and requires a bit of a leap of faith. The value calculator shows that there may be other promotional offers. I have written confirmation from T-Mobile that I'll get the full promotion offer of $399.99 for each old iPhone as long as it meets the criteria despite what the low trade-in estimate shows.
  • What's the criteria for a trade-in? Trade must be paid off and in good working order without physical or liquid damage, and it must have "Find My Phone" turned off.
  • Are there any other costs? If you live in a state with sales tax, be prepared to pay the tax on the full price of the phone at time of purchase. I'm in Washington State and pay nearly 10 percent sales tax, so this was not a trivial amount.
  • Any other fees when I make the purchase? Maybe. If you buy the 32GB model, then sales tax, if applicable, is all that is due at first. I paid $99.99 for the 128GB models and $199.99 for the 256GB model.
  • Why did you buy a 256GB model? The T-Mobile site was getting hammered last night, and at one point there were only two iPhone 7 models shown, so I thought the rest were sold out. Thus, I ordered a 256GB one only to later find out it was just a site overload issue, and the 128GB was still available for pre-order.
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It took me about 25 minutes to get through all three of these orders and trade-in offers while accessing the site through the My T-Mobile portal. It was a bit painful, and I still have some doubts about how things will shake out. In a couple of months, my account should be settled out with the trades completed and credits being properly applied.

In the end, we should see a net increase of just over $35 a month for these three new iPhone 7 models for the next 24 months. Considering I am still under the Simple Choice four lines for $120 10GB plan, that's not a bad deal. Essentially, we were able to get these new iPhones for about the same monthly increase as if I was forced to upgrade to the new T-Mobile One unlimited plans. I'm sticking with my Simple Choice plan as long as I can.

Next week, the three new iPhone 7 models should arrive, and we'll start the trade-in process. I have images and written statements from T-Mobile customer service representatives in case the trade offer attempts to stiff me with only a $50 to $60 reimbursement. This is going to take some time to see the benefit here, but in the end, I think it's worth it for my daughters who will use these new iPhone 7 models for at least two to three years.

I also purchased my own 128GB Apple iPhone 7 Plus in order to cover iOS on ZDNet, so stay tuned later in the month for that full review.If you have any further questions on the process, please let me know in the comments below.

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