How to Find Out if You Can Upgrade Your iPhone

This article explains how to determine your iPhone upgrade eligibility if you're making monthly payments for your device to Apple or your carrier.

How to Check Your iPhone Upgrade Eligibility

Figuring out who's eligible for an upgrade is a little different than it used to be when there was an iPhone subsidy system (see below). You'll need to check with your phone company (or Apple, if you bought your phone directly). Generally speaking, you're eligible to upgrade to a new iPhone if you:

• Haven't bought a new phone in two years or more.
• Switch to a new phone company.
• Pay off the balance on your current iPhone.
• Use a monthly purchase plan that allows for regular upgrades (often after 12 months).

Check whether you can upgrade your iPhone with the following tools:

• Apple Upgrade Program customers: Check your status at Apple's website.
• AT&T customers: Dial *639# and you'll get a text message with your status.
• Sprint customers: Visit https://www.sprint.com/ and login into your Sprint account.
• T-Mobile customers: Log in to your T-Mobile account or the T-Mobile app using these instructions.
• Verizon customers: Dial #874 and you'll get a text message with your status.

The End of the iPhone Subsidy System

Phone companies used to discount, or subsidize, the price of the phones they sold. The price they advertised for a new phone was almost never the actual cost of the phone. For example, if a new iPhone actually cost US$699 from Apple, phone companies would often sell it for $399. The companies paid Apple the difference between the full price and what they charged customers.

As part of this deal, phone companies made customers sign contracts—often for two years—that locked them into using that phone company. This strategy made financial sense for the companies because they make most of their money on monthly voice and data plans, and customers often stayed loyal after their contracts ended.

Almost no phones are sold with subsidies these days. Instead, customers pay full retail price for their phones. That's why the iPhone 12 Pro costs $999 and up, instead of a more appealing price hundreds of dollars lower. To make up for paying more money upfront, customers rarely sign contracts anymore. Instead, they now pay month-to-month and are free to switch phone companies and upgrade to new phones more often.

Buying iPhones on the Installment Plan

The most common kind of phone-company contract these days relates to how you buy the phone. This is the contract that determines whether your iPhone upgrade eligible. Because customers now pay full retail price for their phones, and because not everyone wants to plunk down $1,000 for a phone, all the phone companies—plus Apple—sell the iPhone in monthly installments.

Instead of spending $1,000 upfront for an iPhone, you can spread the cost out over 24 monthly payments that are charged with your regular bill.

With this system, you can upgrade to a new iPhone when you've paid off the old one or at a point defined by the company selling the phone. For example, many monthly purchase plans let you upgrade to a new phone once a year, even if the old phone isn't paid off. You simply trade in the old phone and keep paying for the new one.