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iPhone 5S Coming, Time to Check Mobile Contract

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By Brett Snider, Esq. on September 03, 2013 12:55 PM

Apple is poised to announce the new iPhone 5S and 5C on September 10, and with every new smartphone comes a new opportunity to review your mobile carrier contract.

Even if the new iPhone is only a blue or champagne colored version of its predecessor, reports Gizmodo, most cell phone service providers will offer a discounted rate when pre-ordering the shiny tech newness -- so long as you renew your contract.

It may be worth the discounted price to renew your mobile contract, but here are a few things you should review before you sign.

Unlocking Your Phone

Whether you're purchasing a new iPhone or the latest Samsung offering, you'll likely be purchasing the phone through a service provider like AT&T, Sprint, or Verizon.

These major carriers will offer new smartphones, which can retail around $800, with a substantial discount so long as you sign a 2-year exclusive contract with that carrier. These contracts effectively prevent you from legally unlocking your phone and switching to a new carrier before your contract is up.

Although it may be a chunk of change, you may want to consider buying a phone contract-free, or even a pay-as-you-go plan. Your upfront price may be more, but you'll be able to change carriers on your phone without waiting until your contract expires.

Privacy Concerns

Odds are that most consumers will think twice about purchasing an iPhone through Verizon after major details of NSA phone surveillance were released.

Unfortunately, pretty much every major carrier is liable to offer up customer information to agencies like the NSA, so if you really want to stay off the grid, you can always load your contract-free phone with pre-paid SIM cards.

This isn't really a practical solution for most smartphone users, so just be aware that on most carriers, regardless of the contract, you won't have much privacy in your smartphone data.

Cancellation Fees

If you do sign up for a multi-year contract with a major carrier, be aware of the costs for terminating the contract early. AT&T may charge you up to $325 for cancelling a smartphone data plan before your time is up.

Make sure to locate the early termination fee clause before signing a new contract, and consider how much it might cost you to change your mind.

All of these considerations may seem incredibly trivial when weighed against the allure of a shiny new iPhone, but taking a few minutes to understand your new mobile contract may save you some surprises later on.

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