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T-Mobile’s new low-cost iPhone plans start at $5 per month

September 23, 2015

Pedestrians stroll by a A T-Mobile branch on the corner of West 17th Street and 6th Avenue in Manhattan, New York, U.S., on Sunday, July 26, 2015. T-Mobile will be announcing their earnings this week. Photographer: Craig Warga/Bloomberg *** Local Caption ***Pedestrians stroll by a A T-Mobile branch on the corner of West 17th Street and 6th Avenue in Manhattan, New York, U.S., on Sunday, July 26, 2015. T-Mobile will be announcing their earnings this week. Photographer: Craig Warga/Bloomberg *** Local Caption ***
Pedestrians stroll by a A T-Mobile branch on the corner of West 17th Street and 6th Avenue in Manhattan, New York, U.S., on Sunday, July 26, 2015. T-Mobile will be announcing their earnings this week. Photograph by Craig Warga — Bloomberg via Getty Images

Remember when carriers used to pay for part of your new phone—giving you that $649 iPhone for just $199? It turns out it’s not completely over, after all.

On Wednesday, T-Mobile announced that it would offer the iPhone 6s 16 GB devices for just $5 per month for customers who trade in a iPhone 6, 6 Plus, Galaxy S6 Edge, or Note 5; a $10 monthly price for iPhone 5s and Galaxy S5 trade-ins; and $15 for older smartphones like the iPhone 5 or 5c. If you don’t have a phone to trade in, the monthly payment is $20.

If customers stay 18 months with T-Mobile, they’ll have the option to keep them for $125 off the retail price, minus what they’ve already paid. That’s nowhere near the $450 discount consumers used to get on new phones by agreeing to a two-year contract, but it’s better than no discount, which is what the other carriers are giving. Verizon and AT&T may offer financing so you don’t have to pay for the whole cost of a new phone at once, but their financing options don’t save you any money off the $649 price of an iPhone 6s: Verizon offers monthly payments of $27 for 24 months for a new phone, and AT&T offers monthly payments of $21 for 30 months. Under all three carriers, you can leave and keep your phone if you pay the remaining balance on the phone’s full retail price.

T-Mobile’s move follows Apple’s announcement of its monthly payment plan for people who don’t want to spend $649 or more up front on a new phone. With all this competition for monthly payments, more programs like these could shake out in the consumer’s favor.