Build the ownership cost boundary
Separate phone and service
Compare the service plan you would choose without the promotion with the required plan. The incremental service premium belongs to the device offer.
Credit vesting
Monthly bill credits can stop after early cancellation, payoff or plan change. The uncredited device balance becomes an exit cost.
$1,000 phone with 36 monthly credits
- Cost layer
- Device payment: $27.78/month
- Time or usage input
- Promotional credit: $22.22/month
- Cost layer
- Net device line: $5.56/month while eligible
- Time or usage input
- Required premium plan costs $20/month more
- Cost layer
- Incremental 36-month cost can be $920 despite an $800 headline credit
The boundary should include only costs that change between the options being compared.
This decision belongs in The Real Cost of Devices and Appliances. Use Subscription Hardware: Find the Buyout, Lock-In and Renewal Cost to check the next assumption, then test the numbers in the Subscription Cost Calculator.
When future trade value drives the offer, stress-test the phone's resale value instead of accepting one quoted credit as certain.
Adjust the ledger for the real decision
Trade-in value
A trade credit replaces private resale and may require condition, timing and activation steps. Compare net trade value with realistic sale proceeds.
Keep-current-phone case
Include battery replacement or repair, expected remaining life and eventual resale. The purchase price already paid is sunk.
Build a complete cost boundary
A phone promotion can move cost into the service plan and recover credits slowly. Compare the device, required service and exit value as separate ledgers through the month you may change carriers.
Offer terms that reveal the total device cost
- Unlocked cash price and financed device price.
- Required plan cost compared with service you would choose anyway.
- Credit schedule, trade conditions and early-exit balance.
- Record device price, installment length and credit schedule.
- Calculate incremental required service cost.
- Model exit after 6, 12 and 24 months.
- Compare trade credit with net resale.
- Compare with repair and continued use of the current device.
Turn the cost boundary into a working estimate
Subscription Cost Calculator
Expose renewal compounding and the year when buying may become less expensive.
Costs that disappear from a monthly view
- Calling monthly credits an upfront discount.
- Ignoring a required premium plan.
- Assuming credits continue after early payoff.
- Counting the old phone’s original price in the keep decision.
Questions this decision usually raises
Is the promotional phone really free?
Only if all required service, term and trade conditions add no incremental cost and every credit posts.
Should resale value count?
Yes, for whichever option owns the device at exit.
Does 0% device financing have no cost?
The financing rate may be zero while service lock-in or foregone discounts create economic cost.
Sources for prices, timing and useful life
This page explains a calculation, not a personal recommendation. Contract rules and consumer protections vary by product and jurisdiction. Check the current agreement and official guidance before acting.