Let’s take a look at how the costs of T-Mobile’s JUMP! upgrade program add up
It amounts to a trade-in really, and you do have to pay for the privilege, $10 extra per month, which also includes total equipment coverage against damage to the device, malfunctions, loss or theft. How do the numbers wash out though? Is it a good deal? We will give you some examples and run through the basic math.
The way the program works is not very complicated. Once you have been enrolled in the JUMP! program for 6 months, you can upgrade to a new phone using the same financing arrangement that exists with T-Mobile’s Equipment Installment Plan (EIP) for new or eligible customers. For those that do not understand how the EIP works, here is the rundown:
In lieu of subsidies and a contract, T-Mobile separates the equipment from the service completely. When you activate service, you can buy your device at full retail or make a down payment and make 24 equal payments. You mobile service is a separate payment (on the same bill). Your down payment may vary based on your credit score. Arguably, the result is the same as a two-year service agreement, but we are not going to get into that right now.
We will use the venerable Samsung Galaxy S4 for our example. We are not including the mobile service fees or any applicable taxes since they vary state by state. Under normal circumstances, “well qualified buyers” would make a down payment of $99.99 and then make 24 equal monthly payments of $20 which equals the retail price of $579.99.
With the JUMP! upgrade plan, you pay an extra $10 per month for the privilege of upgrading your equipment a couple times per year. $99.99 down, plus $30 per month for six months equals $279.99 spent on equipment by the time you are eligible to upgrade. Assuming you upgrade to a device of equal standing, you would trade-in your well-cared-for device then pay another $99.99 down for a new one and continue on your way making payments of $30 per month. $279.99 spent over a period of six months and being able to upgrade at that kind of preferred pricing is not a terrible option at all. For the year, you could end up paying $559.98 for two new phones which is less than full retail for a single new device, or in this case, a new Galaxy S4.
What if you are not a “well qualified buyer?” Well, your initial down payment for the equipment is higher, but that is offset by lower monthly payments. Let us assume that your credit is not stellar and T-Mobile requires a down payment for an SGS4 of $249.99. That would leave 24 equal payments of $13.75 for the equipment, plus $10 for JUMP! $249.99 plus a combined $142.50 over six months equals $392.49 spent in six months, or $785 per year.
How about someone with credit in the dumpster? How about a big down payment of $349.99 which leaves 24 equal payments of $9.59 per month, plus $10 for JUMP! Over a six month period, it adds up to $467.53, or $935 per year. We have outlined the costs in the table below. With exception of the "well qualified" rates, we picked the potential down payments at random, but the math itself clearly works since T-Mobile's EIP does not charge an interest rate (0% APR).
Our example does not take into account changes that might occur with a customer's credit rating, but you can count on T-Mobile conducting a check at each time you want to upgrade your device. Also, our example touches on similar price schemes for similar devices. The cost structure obviously goes up if the change were being made from a Galaxy S4 to an Apple iPhone 5, or from an LG Optimus L9 to an HTC One.
In the final analysis, JUMP! is going to be a great option for people with a good credit score and extra money to spend. However, if you are on a tighter budget, or have bruised credit, it is a good idea to examine other options if you like to replace your gadgets often.
1. Shatter (Posts: 1997; Member since: 29 May 2013)
Hopefully after their merge with metro PC is finished they will have good enough coverage to be a threat to att/verizon.
4. Zero0 (Posts: 583; Member since: 05 Jul 2012)
MetroPCS shouldn't help coverage by much, as it's an even smaller network than T-Mobile. The good news is that their spectrum is great (PCS, as the name suggests, and AWS). T-Mobile should be able to add HSPA+ capacity and is in position to deploy 20x20MHz LTE eventually.
2. HASHTAG (unregistered)
Maxwell, you did a really good job with this article! Very well explained! Though, this article has no effect towards me since T-Mobile doesn't cover my area. Lol.
3. g2a5b0e (Posts: 2118; Member since: 08 Jun 2012)
This article fails to take a major factor into account. The $10 fee for JUMP includes PHP. If you already have insurance (most people seem to), you're only paying $2 more a month not $10. Also, if you have a Note 2 or an iPhone 5, you're actually saving $2 a month because the PHP on those devices is $12. It's essentially a no-brainer for folks with those 2 devices because it saves you money. Also, if you never choose to jump, you can still pay off your phone to own it like you normally would.
5. Maxwell.R (Posts: 166; Member since: 20 Sep 2012)
"...which also includes total equipment coverage against damage to the device, malfunctions, loss or theft." - Second paragraph. T-Mobile is protecting "leased" equipment basically. Since insurance/coverage is otherwise optional, it is a legitimate out-of-pocket expense for the customer.
It is definitely a good deal if you get the preferred deposits/payments, but the math clearly shows that in as little as a year, an uneducated consumer will pay nearly twice as much in some cases.
6. g2a5b0e (Posts: 2118; Member since: 08 Jun 2012)
I apologize for missing that, but T-Mobile's credit checks aren't exactly tough. I have no credit & I pay the so-called "stellar credit" price. My simple point was that if you already have insurance, which most people do & you're paying the "stellar credit" price, which most people are, this is a bargain. You're paying $2 more a month or $2 less a month to upgrade twice a year without paying off the rest of your phone. The only boon would be to those that prefer to keep their devices after they upgrade.
10. Gawain (Posts: 349; Member since: 15 Apr 2010)
Most people have insurance? Really? I don't know if I buy that...
12. g2a5b0e (Posts: 2118; Member since: 08 Jun 2012)
I read that T-Mobile reps say that an average of 60-70% of people walk out of a T-Mobile store with insurance on a new phone. Whether or not they actually keep it is another story. In any event, if you've never had insurance on your phones & you like to switch devices often, this may be the thing to JUMP on.
14. HRothGar (Posts: 1; Member since: 12 Jul 2013)
Not to mention that after an account has 2 years of service everyone on the account is automatically eligible for well qualified pricing,
7. chazking99 (Posts: 12; Member since: 09 Feb 2012)
Just to let you know MAXWELL, T-Mobile does not run your credit every time you do eip, it runs credit when you first set up and that credit rating stays with you, the rest of your time at T-Mobile. People that have good credit will definitely benefit from this. The $10 dollar payment also includes mobile lookout with the insurance, which the regular insurance does not cover. Please do some research before you decide to half ass slam somebody or a company.
9. Gawain (Posts: 349; Member since: 15 Apr 2010)
He didn't slam anybody. Check out this blog about hidden costs and what a customer with a credit score of 650 would be paying. Looks like MAXWELL was on the money. I bet if a payment is late on a bill or something T-Mo will recheck credit. No way they're renew "lease" type agreements without measuring credit risk. He also wrote about the insurance in second paragraph...http://asuperhumanlife.com/t-mobiles-jump-plan-hidden-costs-and-why-you-should-run-instead/
8. Topcat488 (Posts: 1124; Member since: 29 Sep 2012)
The uneducated, will always be the one's who pay, universally.
11. Captain_Doug (Posts: 748; Member since: 10 Feb 2012)
Great write up. Exactly what I've been meaning to get too.
13. joey18 (Posts: 513; Member since: 20 Jul 2010)
good deal if 10 extra cover insurance iphone insurance 11 b
15. dcgore (Posts: 204; Member since: 24 Feb 2012)
I have ok credit but if T-mobile is going to run a check every time i upgrade (6 months) as the article says, then i am going to definitely slip to the bad credit category.
16. munkyBeatz (Posts: 4; Member since: 18 Aug 2013)
No, great thing about the phone carriers, is that once you've established yourself as a customer in good standing then this isn't necessary. Don't miss payments, and you don't have to worry about any hard inquiries showing up on your credit report when you go to renew your contract and/or upgrade your phone. As for your "credit worthiness" category, even if your actual credit score stays the same, as long as you continue to remain an customer in good standing with the carrier your standing with T-Mobile will improve.