The New AT&T Phone Payment Plans: What You Should Know

AT&T is cutting its plans for financing a new mobile phone in half, giving customers just two options when it comes to buying a new phone without plunking down a wad of cash all at once.

In a nutshell, the plans boil the decision-making process down to two questions: Do you want a lower monthly payment or would you prefer a quicker upgrade? If you’re torn already, it might be a good time to review your budget and see what fits with your finances.

Starting June 9, AT&T will offer AT&T Next Every Year, which allows customers to upgrade to a new device every year, with a 24-month financing term. The second option available beginning on the same date is the AT&T Next plan, which allows customers to upgrade every two years with a 30-month financing term.

Side-By-Side Cost Comparison

AT&T offered the following cost comparison between the two financing plans:

AT&T Next: $749.99 retail price phone is $0 down and $25/month, or $225 down and $17.50/month

AT&T Next Every Year: $749.99 retail price phone $0 down and $31.25/month, or $225 down and $21.88/month.

The new plans also allow customers to trade in any device they own and apply the value toward a new device or make a down payment toward a new device at the time of purchasing the plan.

Here’s how it works, per AT&T’s press release.

AT&T Next Every Year

Primary Benefit: New device every year
Upgrade Eligibility: 12 monthly payments or 50% of retail device cost paid off and trade-in of eligible device
Pay Off Phone: 24 months

AT&T Next

Primary Benefit: Lower monthly device payment
Upgrade Eligibility: 24 monthly payments or 80% of retail device cost paid off and trade-in of eligible device
Pay Off Phone: 30 months

Both plans are available for well-qualified buyers, meaning you’re going to need a good credit score to get these financing plans. If you don’t have good credit, it’s going to cost you more up front — customers who don’t meet AT&T’s “well qualified” standards will be required to make a 30% down payment.

If you’re not sure where your credit stands, you can check out two of your credit scores for free on Credit.com before applying and potentially being rejected. If your credit is in rough shape, you may be able to improve your score by disputing errors on your credit report, paying down high credit card balances and limiting new credit inquiries while your score rebounds.