AT&T Next Review & Credit Requirements – Read This First
If you want to upgrade to a new smartphone every year AT&T’s wireless plan called AT&T Next was created with you in mind. Typical smartphone plans require that you commit to a two-year contract, and you cannot change phones during this time without paying a big early termination fee. This plan came into existence after T-Mobile’s similar Jump plan, and the concept is pretty simple: you pay a small monthly fee to upgrade your phone every year without a down payment. So, how does it work exactly? What are the credit requirements? And is it worth it?
How AT&T Next Works
When you use AT&T Next to buy a smartphone, you will not have an annual service contract, or a down payment, or activation, upgrade or finance fees. There are two installment plans to choose from:
AT&T Next 12 allows you to make 20 monthly payments that equal the full retail price of a new smartphone. After making 12 payments, you can choose to trade in the phone to upgrade to a new one.
AT&T Next 18 allows you to make 24 monthly payments that equal the full retail price of a new smartphone. After making 18 payments, you can choose to trade in the phone to upgrade.
AT&T Next 24 allows you to make 30 monthly payments that equal the full retail price of a new smartphone. After making 24 payments, you can choose to trade in the phone to upgrade.
AT&T Next With Down Payment allows qualified and well-qualified buyers to pay 30% down on their device cost and then make 28 monthly payments that equal the full retail price of a new smartphone. After making 12 payments, you can choose to trade in the phone to upgrade
The monthly installments are determined by dividing the full retail price of the phone into 20 to 30 payments (depending on the early upgrade plan you choose). There is no interest on the payments, though. When you buy your phone, you will pay the full sales tax on the full retail price. After you make your first two monthly payments, you can also choose to pay off the remaining balance.
AT&T Next Credit Requirements
AT&T Next is only offered to new customers with qualifying credit requirements or existing customers with an account in good standing. The plan is not available for prepaid GoPhone’s, but most smartphones sold by AT&T are eligible. It seems the credit requirements are based more on credit class and payment history with AT&T rather than credit outside of the company.[/B] But AT&T Next loosened its strict credit requirements in the last year by introducing AT&T Next with Down Payment. Now, many people with only fair to good credit are getting approved. So, if you have poor credit, this may be the best AT&T wireless early upgrade option for you. Important: If you already have an account with AT&T that is in good standing, you most likely will not get a credit check at all.
There are some good things about the AT&T Next plan, and it may be a good choice for you if you like to always have the newest phone. You can upgrade as early as once every year, and you can avoid the upgrade and activation fees you typically need to pay when you buy a new device. You can also get a new phone without making any initial payment, aside from sales tax, unlike getting a subsidized phone on a two-year contract. The plan is also a good deal if you get cell service through AT&T’s Mobile Share plan. AT&T’s other plans include the cost of subsidizing your phone that is built into the monthly fee. Mobile Share plans have a $15 to $25 per month discount for each phone you buy through the Next plan, however. For example, this means that a Mobile Share plan with unlimited talk and text and 300MB of shared data will cost $20 per month, plus $40 for each smartphone connected, for a total of $60. If you buy your phone through AT&T Next, you will only pay $45 per month for your plan. Over at CreditShout, there are detailed reviews of all the wireless carriers that include a comparison of the 2-year cost of ownership. Check it out if you want to see how the costs of AT&T Next stack up against the competition.
There’s a lot of fine print to read, and quite a few gotchas. Here are some things you should understand before you sign up:
You need to pay the sales tax on the full retail price of the phone at the time of purchase.
You will be responsible for any remaining unpaid balance if your phone is lost or damaged, and you can’t upgrade after 12 or 18 installments if you lost or damaged the phone. This is why you should get mobile insurance to cover you.
When you trade in the phone, it must be in good, working condition or you will be responsible for the remainder of your installment payments. You do not get anything when you trade in your phone except for the new phone.
Until you finish the installment plan, you are just leasing the phone.
All things considered, the AT&T Next plan might be a good choice for you if you absolutely want a new phone every year, and you’re willing to pay more in the long run to get it. If you can accept the higher cost — and you have good to great credit — it may be just what you’re looking for. If you are on a regular 2-year upgrade cycle, we recommend AT&T Next 24. At the end of 2 years, you will own your phone for $0 down and 0% APR, you can re-sell it, and then upgrade to a new smartphone for $0 down and 0% APR again. Plus, AT&T provides better pricing on its device access fees when you use AT&T Next to further incentivize you to go this route. So it’s a win-win situation for you.
Credit Shout is a community of personal finance experts dedicated to helping you save money and make smart financial decisions. Learn how to master your credit card rewards, improve your credit score and start eliminating your debt.