Apple introduced its iPhone Upgrade Program last year which allows the consumers to upgrade their iPhone every year to the newest model.
This means that if you signed up up to a year ago, you can upgrade to a brand new iPhone 7.
So it works like this:
You must have been enrolled in the program for at least previous 6 months and have paid at least 12 payments. If your payments are less than 12, then you will have to pay the difference of amount and you can still upgrade.
If you meet the above conditions, you can take your phone to the nearest Apple Store and exchange it. Take along with you two forms of your ID, your credit card and your Social Security number. And you also need to be knowing your wireless account password.
If your current iPhone is damaged, you can still trade it in but of course after AppleCare deductible depending on the extent and type of damage.
If you are not satisfied with your carrier, then it is also the time to change your carrier too.
Do remember that you are not trading in your phone. In reality you are buying a new iPhone 7 on 24 monthly payments. So the other option might be to keep the phone with you and it will be yours in two years. When you use the Apple Upgrade program, the 24 months clock sets from start again.
More details about Apple Upgrade program are available on their site. In fact different carriers are also offering free trade in programs for iPhone 7. Both T-Mobile and Sprint are offering this option. There is also an offer from AT&T.