The phone you trade in doesn't have to be the one you're currently using, if I recall.
"get for free" means you're going to get bill credits of the EIP amount -- so, the device you're getting will be considered under payments for the next two years. If you're planning on selling it, it may not receive the same value you're hoping for with it not being unlocked [you can't permanently unlock without it being paid off] and without it being paid off [some folks have that concern you'll stop paying]. If you pay the device off early, I've heard rumors the bill credits stop, but I cannot confirm or deny this.
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As long as you trade in an eligible device, you are good to go. Just know that if you are not trading in the device you are still paying for, we will not be able to reimburse you for the amount you owe on that device if you are also wanting to take advantage of our carrier freedom benefits.