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Unlocked or Carrier? How You Should Buy Your Next Phone

Buying a smartphone was pretty simple five years ago. You would head over to your carrier's local branch, pick out a phone and pay a low up-front price subsidized by signing a new two-year contract. But carriers have since moved away from contracts and the subsidized phones that came with them.

These days, there's no real price difference between buying a phone locked to a specific carrier and buying that same device unlocked that can be used on any network, though the largest carriers will let you pay off that device in installments. You definitely don't need to go to a local store to pick out your next device, although if you want a phone immediately, it's still a solid option.

Key Considerations

Once you've picked the phone you want to buy, here's what you should consider before deciding on a carrier or going the unlocked route.

Make sure the unlocked phone works on your preferred network. This used to be a bigger problem when unlocked phones worked solely on GSM networks. That was fine for AT&T and T-Mobile customers, but Verizon and Sprint's networks are CDMA. Many newer devices are universal and support all carrier bands.

The OnePlus 5 is available unlocked, but it won't work with every cellular carrier. (Credit: Keith Agnello/Tom's Guide)The OnePlus 5 is available unlocked, but it won't work with every cellular carrier. (Credit: Keith Agnello/Tom's Guide)That's not true of all devices, though. For example, the new OnePlus 5 is unlocked, but because it doesn't support CDMA networks, it doesn't work on Sprint or Verizon. Make sure to confirm that your unlocked phone will work out of the box with a network by looking up its specs and checking under Network Bands. That's a step you don't have to take when buying directly from a wireless carrier, since they'll only offer phones that work on their network.

MORE: Best Unlocked Smartphones

Find out if your carrier restricts any features to locked phones. Unlocked and carrier-locked phones aren't necessarily created equal. AT&T, for instance, offers the option for voice-over-LTE and Wi-Fi calling only on AT&T phones, not unlocked ones.

Consider up-front costs. Buying an unlocked phone requires you to pay the full price of the device outright. In contrast, many carriers let you pay off phones in monthly installments over two years and, in some cases, will lease you a phone. The major providers offer interest-free financing, so the cost of buying the phone is the same no matter which route you take.

You can buy the Galaxy S8 with monthly payments through wireless carriers, but Samsung offers payment plans, too. (Credit: Sam Rutherford/Tom's Guide)You can buy the Galaxy S8 with monthly payments through wireless carriers, but Samsung offers payment plans, too. (Credit: Sam Rutherford/Tom's Guide)Some phone-makers do offer their own installment plans. Apple's iPhone Upgrade Program lets you spread out payments for an unlocked iPhone with AppleCare+ over up to 24 months, and Samsung lets you do likewise when you buy an unlocked Samsung Galaxy S8 or S8+ directly from its website.

Who should buy an unlocked phone?

Early adopters. If you need to have the newest device as soon as it's released, then buying an unlocked phone is the way to go. You'll need to have the cash on hand to pay for it up front, and you won't be able to take advantage of any carrier deals, but that's the price of having the latest and greatest before everyone else.

Bargain hunters.From Motorola and ZTE to Huawei and OnePlus, there are several phone-makers that offer unlocked phones at a very low price. In fact, we've tested a number of very good unlocked phones under $200. One reason these phones are so affordable is that the phone-makers don't need to deal with the carriers, and they can pass on that savings to you.

Though it came out last year, Huawei's Honor 8 remains a good unlocked option. (Credit: Jeremy Lips/Tom's Guide)Though it came out last year, Huawei's Honor 8 remains a good unlocked option. (Credit: Jeremy Lips/Tom's Guide)Frequent updaters. Buying an unlocked phone means you're free to upgrade when something new comes along. Even better, you can resell your current phone when you already own it free and clear.

International travelers. Having an unlocked phone makes it easier to swap out your carrier's SIM card with a pay-as-you-go option for using on networks overseas.

Who should buy a phone from a carrier?

People who want to pay off a phone in installments. If you're looking for a deal on a brand-new flagship phone from Apple, Samsung, Google or any of the other major hardware manufacturers, your best bet is to go through a carrier. AT&T, T-Mobile, Sprint and Verizon all offer discounts, trade-in offers and other ways to entice you to buy a new phone (and sign up for their monthly data plans).

Most unlocked phones also require you to pay the full price of the phone upon purchase rather than spreading out payments over the length of an installment plan or lease program. For price-conscious smartphone buyers, the carrier is the way to go.

The good news: If you end up buying a phone from a carrier, you can request that it be unlocked after you've paid for it in full and have fulfilled your contract, thanks to the Unlocking Consumer Choice and Wireless Competition Act. Each carrier has different requirements to unlock a phone, so check to make sure you qualify before submitting a request.

What should I do before I buy?

Research handset options and availability. You can buy an unlocked phone online from a variety of retailers — including Amazon, Best Buy and others — and you'll have your pick of just about every phone on the market. If you want to go the carrier route, make sure the device you want is available.

Double-check your unlocked phone's network compatibility.
As we noted above, confirm that the unlocked phone you want works with the carrier you’re planning on using. You can find what bands a phone supports listed among its specs. Here are the 3G and 4G networks that the Big Four Carriers support.

Carrier
3G Network
3G Bands
3G Frequencies (Mhz)
4G LTE Bands
4G LTE Frequencies (Mhz)
AT&T
GSM/UMTS/HSPA+
2, 5
1900, 850
2, 4, 12, 17
1900, 1700 abcde, 700 bc
Sprint
CDMA
10, 1
1800, 1900
25, 26, 41
1900 g, 850, 2500
T-Mobile
GSM/UMTS/HSPA+
2, 4
1900, 1700/2100
2, 4, 12
1900, 1700 def, 700 a
Verizon
CDMA
0, 1
850, 1900
2, 4, 13
1900, 1700 f, 700 c

Pick a carrier. With an unlocked phone, you have your choice of carrier — you can pick one of the big four wireless providers, or choose a budget or prepaid service provider. We've rated several large and small carriers based on performance, plans, phone selection and more.

MORE: Who Has the Fastest Wireless Network?

The major carriers do charge fees to activate a new phone on their networks: $25 at AT&T and $30 for Sprint and Verizon. T-Mobile doesn't call it an activation fee, but they charge $20 for a SIM card kit. This applies to devices you buy from the carrier as well as devices you bring in to activate, but some carriers waive activation fees if you buy directly from them (and if they're feeling charitable).

What should I do after I buy?

Set up your new device. If you don't want the hassle of getting your new phone up and running, going through a carrier may seem like the wiser choice. You can get assistance with moving your SIM card over at the point of sale (unless you purchase your new phone online), and some carriers help you transfer your old phone's data over to your new phone.If you buy your phone online, you may need to replace your phone's SIM card on your own. (Credit: Suphaksorn Thongwongboot/Shutterstock)If you buy your phone online, you may need to replace your phone's SIM card on your own. (Credit: Suphaksorn Thongwongboot/Shutterstock)

Transfer your data. Most phones make it easy to transfer your old data, so you don't really need any extra help. For iPhones, all you need to do is sign in with your Apple ID to port over most of your contacts, apps and saved pictures. And for Android devices, you just log in to your Google account. You likely won't find it much of a hassle to switch data from your old handset if you go the unlocked route.

Delete some apps. You'll spend less time deleting unwanted apps and skins off an unlocked phone. Take an Android phone from Verizon, for example: It has a host of mostly redundant preinstalled apps, ranging from Verizon-branded apps and games to NFL Mobile and Slacker Radio. AT&T, Sprint and T-Mobile are bloatware offenders, too. (Good news if you prefer iPhones: Apple doesn’t allow outside apps to come preinstalled on its phones.)

Still, even unlocked phones may feature some bloatware. An unlocked Galaxy S8 from Samsung comes with stuff you might not want, like the Samsung Gallery photo app and Samsung's Connect smart-home management app.

Buy insurance. You don't need to insure your smartphone, but if you've been known to shatter a screen or two, it's probably a safe bet. When buying a phone through your carrier, you'll often get the option to add device insurance for a small monthly fee. AT&T charges $8.99 a month for its Mobile Insurance plan, Sprint's Total Equipment Protection starts at $9 a month and T-Mobile's Premium Handset Protection starts at $9 a month for customers on the Jump! upgrade program. Verizon's most comprehensive offering, Total Mobile Protection, adds $11 to your monthly total. These insurance programs offer protection against things like lost, stolen or accidentally damaged phones and out-of-warranty malfunctions.

Accidents happen, but there are a number of protection plans available from carriers. (Credit: ymgerman/Shutterstock)Accidents happen, but there are a number of protection plans available from carriers. (Credit: ymgerman/Shutterstock)A few manufacturers offer their own insurance programs if you buy an unlocked phone. Apple, for instance, offers AppleCare+ for unlocked iPhones purchased through its iPhone Upgrade Program. ZTE and Huawei provide a one-year warranty and customer service for people who buy unlocked phones directly from their websites.

MORE: Cell Phone Insurance Plans Compared: What's Worth It?

Bottom line

Here's the deal: Buying a new phone comes down to money and cell service. If you want a specific phone and the carrier that provides the best service in your area is offering a deal on that device that will save you some cash, that's a good way to go.

If you hate the idea of being tied to a carrier and have the money to splurge on a flagship phone whenever you want, then buying an unlocked phone is probably the best option. Going the unlocked route is also great for people who want a phone for less than $500, or even as low as $200. Figure out your priorities, do your research and Godspeed!

Additional reporting by Cherlynn Low