Changes coming to cellphone plans: AT&T, T-mobile offering phone upgrades without new contracts

WEST PALM BEACH, Fla. - Ever feel like once you decide to get a new smartphone, it's outdated in just a few months and you're stuck in a two-year contract? Cellphone carriers like AT&T and T-Mobile are offering consumers a chance to upgrade their phone more often if you're willing to pay a monthly fee.

AT&T Next offers you a new smartphone or tablet every year with no down payment, no activation fee, no upgrade fee and no financing fees. The catch? You pay for that device each month. The fees can range from $15 to $50 depending on the device you choose. You can trade in your electronic item after 12 months and upgrade to the latest technology.

Your other option is to keep the device and get rid of those monthly installment payments after 20 months.

T-Mobile offers a similar plan called Jump, which allows you to upgrade your phone up to two times every 12 months. You trade in your old phone for a new one. There is no contract and the feature costs $10 a month.

With T-Mobile, to get the iPhone 5 you would pay a $145.99 down payment, plus $21 a month, and $10 a month for Jump. If you upgraded in six months, your investment would be $331.99.

If you break your phone a lot, these might be cheaper options than buying insurance or paying to have your phone repaired. You need to weigh the costs over the long term of the deal.

Your yearly investment on the low end with AT&T Next would be $180 and on the high end it would be $600.

You need to ask yourself if these new plans are worth the price. Is it better to pay each month so you can upgrade when you want or are you better off signing a two-year agreement or buying the phone outright?

Many consumers are beginning to buy unlocked phones through Google and then signing up for a prepaid service like Straight Talk. While the user bears the cost upfront for the phone, they are not tied to a contract and they have a lower monthly fee than a traditional carrier would offer. Some users say that helps them cut their cellphone bill in half.

My Rate Plan may help you decide if you have the best plan based on how you use your phone, your plan and minutes and data used on a monthly basis.

The AT&T deal begins nationwide July 26.

Print this article Back to Top