It's now easier for subscribers to switch to T-Mobile, while less likely existing customers leave
A change to the way trade-ins are accounted for could help lower churn and add net new subscribers to T-Mobile.
T-Mobile this month started its new trade-in policy that gives existing customers a 100% Recurring Device Credit (RDC), while new customers use a mixed RDC and Fair Market Value (FMV) model. Here's a recurring hypothetical example of what this all means, Let's say an existing customer is taking advantage of a deal in which he trades in his older iPhone model for an iPhone 17 Pro with a retail value of $1,000.
T-Mobile has new rules for the way device trade-ins are handled
Under the old rules, T-Mobile would use a split FMV + RDC. The $1,000 credit would be split into two parts depending on the open market value of the trade-in. Let's say that the phone being used as a trade is worth $250. The existing customer gets $250 applied to his bill while the remaining $750 is applied over a 24-month period ($31.25 per month). The bottom line is that since the existing customer is paying $41.66 per month for the new phone, with the $31.25 recurring credit, he has to pay T-Mobile $10.41 per month.
Because the value of the trade was handled separately, even though T-Mobile's ad might have said the new iPhone 17 Pro is "Free with trade," the bottom line is that this customer's bill rose $10.41 per month. This model will be used for new customers and if you keep reading, you'll learn why.
The new rules, which, as we said, started this month, will use RDCs for all existing customers. With the same hypothetical, existing customers will see their $1,000 split into 24 monthly credits of $41.66, which perfectly cancels out the $41.66 per month cost of the new iPhone 17 Pro. All existing T-Mobile customers will adhere to this 100% RDC method for trade-ins while new customers will use the split Fair Market Value (FMV) + RDC model that existing subscribers used before this month.
It's now more likely that T-Mobile will snag subscribers belonging to rivals and keep its own existing customers
If you are an existing customer on the 100% RDC model who leaves T-Mobile after 12 months, you will still owe the carrier $500 for the iPhone 17 Pro, and you will lose the remaining $500 in recurring credits. Your out-of-pocket cost will be $500. Under the old method, the customer would have received the $275 bill credit and would lose only the $375 in remaining credits. As a result, moving its existing customers to RDC makes it less likely that these subscribers will leave T-Mobile until their new phone is fully paid off.
On the other hand, by allowing new subscribers to receive some up-front money in the form of the FMV of their trade-in, it allows new customers to have extra credit to use toward activation fees, down payments, or the first month's bill. This might make it easier for some Verizon or AT&T customers to make the switch to T-Mobile.
| Feature | Old Split Model (FMC + RDC) for new customers in 2026 | New 100% RDC Model for existing customers in 2026 |
|---|---|---|
| Upfront Benefits | HIGH-Helps pay taxes and fees today | NONE-Everything is on the bill |
| Monthly Bill | HIGHER-You pay a small monthly amount | $0 as the credits equal the cost |
| Leaving Penalty | MEDIUM-You already keep the FMV cash | HIGH-You lose 100% of the value |
Think about this. By using FMV + RDC for new customers, it becomes more likely that customers of rival carriers looking to switch to T-Mobile will decide to do so. And by moving to RDC for existing customers, it makes it more likely that these subscribers will stick to T-Mobile instead of bolting for another wireless provider. T-Mobile has come up with a plan that allows the carrier to have things go their way. They make it easier for rival's subscribers to jump ship while their own customers don't seem likely to budge.
Existing customers who now must go through the T-Life app to do just about anything to their plan or to upgrade their phone, can be switched easily to the new RDC model. New customers, on the other hand, rely on older, legacy billing systems that require a FMV calculation to close the transaction.
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