AT&T has announced a new plan that will allow customers to trade in their devices every year for a new device, or get handsets on a payment plan very similar to T-Mobile’s “contract-free” options.
Under the new plan, customers can purchase a handset or tablet without any down payment and will be required to pay monthly payments—which vary by device—for up to 20 months. Using the Galaxy S 4 as an example, AT&T says that the payments will be $ 32/month. After 20 months, the device is yours to keep.
After 12 months, however, customers can trade in their old handset and upgrade to a new device. They will no longer owe any money on the old handset and will take on payments for the new phone.
The neat part is that if you choose not to upgrade, you can pay off your device at any time. Wireless service is required to be active for as long as you’re paying off the phone, but strictly speaking, you’re not paying for a service contract. Once you pay off your installment plan (which you can do any time, as fast as you want), you can leave AT&T. Two months, six months, ten months, twenty months, it doesn’t matter. Once your phone is paid off, you can leave your carrier whenever you want.
Technically, this is no-different to buying your phone off-contract and getting a month-to-month plan, except that AT&T will help finance the phone. This essentially grants everyone that can pass a credit check a free 20-month, zero-interest credit card to buy new hardware with the chance to swap out hardware every 12 months. The downside, of course, is that owning your phone completely won’t reduce your monthly service bill.