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The AT&T Family Share Plan’s vanishing discount—don’t get burned

The popularity of this article led me to write two followups:

Please give these a read if you'd like to know even more about AT&T Next.

Tomorrow (starting at 12:01am Pacific time, apparently) you can order a new iPhone 6/6 Plus. But you probably already knew that. What you may not know is that if you're on AT&T's Family Share Plan, and you enrolled in that plan with phones on a two-year contract, you'll see a large increase in your bill if you upgrade to a new on-contract iPhone 6—even if your current contract has expired and you're now contract-free.

Why would your bill go up, simply moving from an older to a newer iPhone? That's never happened in the past. But we've not had the Family Share Plan in the past. And when AT&T rolled out this plan, they gave folks an incentive to move to it: they offered a discount for on-contract phones, from a $40 per month per device cost to either $25 (for under 10GB of shared data) or $15 (10GB or more) per month per device. So if you look at your bill, you'll see something like this:

That discount was applied to the under-contract (at the time) iPhone 5 I moved to the Family Share Plan; the other two lines we have in the plan show the same discount. But if I buy a new iPhone 6 under contract, the discount will go away. If we upgrade all three phones with contract iPhone 6's, that'd be another $75 per month!

AT&T doesn't exactly hide this fact, but they don't make it completely obvious, either. Here's how AT&T advertises the Family Share Plan's monthly cost for 10GB of shared data (on the Family Pricing tab of the linked page, but I can't link directly to the tab):

The larger text explains that you can add more lines for $15 per line on a 10GB shared plan. But there's a catch, and the catch is in the "No Annual Service Contract Pricing" double-asterisk footnote, which reads:

No Annual Service Contract options include AT&T Next, bring your own, purchase at full price or month-to-month.

This footnote explains the obvious: phones under contract aren't eligible for the No Annual Service Contract structure, which makes complete sense.

Still, that explanation doesn't tell you that your costs will be different with a phone under contract. But if you scroll down to the "Already an AT&T customer" section and click on the "Click here for upgrade requirements" link, you can find the hidden bad news there (added emphasis mine):

For plans 10GB or higher, customers with smartphones on 2-year agreements prior to 2/2/14 are eligible for the $15/month access rate. For plans 2GB to 6GB, customers with smartphones on 2-year agreements prior to 3/9/14 are eligible for the $25/month access rate. Upgrade: To keep discounted pricing with a new phone, buy via AT&T Next, buy at full price, or bring your own phone.

There it is: if you want to keep the $15 or $25 per month access rate, you cannot do so with a phone under contract. You must either use AT&T Next, or pay full retail price for an iPhone 6.

That means it's time for the math to determine the most cost effective way to buy a new iPhone 6. One key assumption here is that you're planning to keep the iPhone 6 for two years; things will change if you choose to get out early, but I'm not going to get into the alternative scenarios.

The following shows only the variable costs related to a new iPhone 6 64GB model on the 10GB Family Share Plan—the base $100 cost of that plan isn't included, as it doesn't change.

WhenLine ItemBuyNextContract
Up FrontiPhone 6 - 64GB$749$0$299
Upgrade Fee$0$0$40
TOTAL UP FRONT$749$0$339
MonthlyAccess Charge$40$40$40
Family Share Discount-$25-$25$0
Phone financing$0$37$0
TotalsMonthly - 24 months$360$1,109$960
Plus up-front costs$749$0$339
TWO YEAR COST$1,109$1,109$1,299
Notes: Buy = Purchase phone outright. Next = AT&T Next 12 financing plan. Contract = Purchase with two-year agreement.

The AT&T Next 12 plan requires 20 payments over the 24 months; the four "free" months are reflected in the figures above. Costs for the iPhone came from Apple's iPhone order page.

As you can see, buying it outright is the same as using Next, and it saves about $190 over the contract purchase. (Technically, it saves me $200, because my contract doesn't expire until September 14th: AT&T would require an extra $100 if I order a phone under contract on the 12th—even though I wouldn't receive it until the 19th. How's that for unfair?)

Next is appealing if you don't have the cash in hand to buy the phone now. Keep in mind, though, that you don't own the phone until after all 20 payments have been made. You can also turn it in after 12 months, but you have to do just that: turn it in, and get a new phone on a new plan.

If you buy the phone outright, you can upgrade any time you like (because you're not on contract), and you get to keep (sell on your own, give to relatives, etc.) the current phone. For me, that's the sealer to this deal: I'll be buying my iPhone 6 for cash, saving $190 over the contract, and having the flexibility to do with it what I like in the future.

(Per the comments below, you can apparently prepay your Next financing at any time with no penalty, turning your phone into an owned device, with all the benefits above. This may be the best route; I have four hours left to investigate.)

Please note that the above is based on my research, though I confirmed the lack of discounts for contract phones with an AT&T rep during an online chat. Proceed at your own risk, but you really should look closely before ordering at 12:01am tomorrow!

335 thoughts on “The AT&T Family Share Plan’s vanishing discount—don’t get burned”

  1. Ok I want to know what happens if I upgraded my iphone 5 last spring I think it was June I was up for a upgrade and I didn't want a monthly payment for my phone or change my plan I paid $300 for my phone plus the $40 fee what does that mean??they were wanting me to do the monthly and I was about to walk out than they said ok you can pay for it I am on a family plan with my two kids one who has the unlimited data and will not let go of it. no matter what. We paid $80.00 for the first phone than $9.99 for the two other phones and lines. I started out at $254. amonth I went to add my husband they told me I could get his phone for $.99 cents than we started asking what will it add to our bill I was thinking it would be another $9.99 more a month like my kids pulse data but he said oh it will be $50.00 more a month pulse the phone. I was like it says we can have this phone for .99cents than it went into well Att has to make money and if we sold our phones for .99cents we would be out of business . So why did that have that on the phone he said things had changed and you had to to pay $450 for the phone in installments. We walked out without a phone because I didn't get what they were trying to do. I came home to see what everyone was saying and this sucks. Does this mean I will be charged for a phone I already paid for? I get what they are up to but I don't see were they can say you didn't paid enough for your phone so we have to charge you shouldn't be any of there business what you paid for your phone or from who. Do they own all the iPhones for sale out there. If you paid for your phone from ATT after it's paid for you don' pay anymore so where do they have the power to decide what you paid for your phone from someplace else. That's the part I don't understand. I have been with them for over 15yrs and I am ready to go somewhere else because of this.

  2. I hear you Rhonda. I don't understand ATT reasoning's either. I have a different issue that I feel they tricked me into. I'm ready to leave ATT and go to one of these pay as you go plans or even give up on the whole cell phone thing and stick with a land line.

  3. They offer a great deal and then the next time I get a bill everything changes. It's very frustrating. We have 4 lines and it's suppose to be under 200 a month including taxes and fees.
    It changes all the time. I feel as though I'm tricked into a "great" deal and then have to be on the phone for an hour just to fix the problem.

    1. You are definitely not alone with that problem. Especially if they convince you to bundle package your wireless phones, landline, cable and internet. They tell you its a simple and appealing plan , then bill you something astronomical. When you go to clean things up, there are three different entities or divisions of the company, and none of them are responsible for the added charges, none of them work together, and none of them can give you any answers. The only thing they do is transfer you from one person to the next or give you another number to call which offers to solve absolutely nothing. After three weekend in a row of spending any where from 4-6 hours straight trying to resolve the billing issues, I am no further along and still left with this exorbitant bill. To top it off one of the cell phone on the plan, was stolen, and AT&T support would not help locate it, even with the ability to do so using GPS. Yet they are willing to still bill me for the phone even though it's been reported stolen and we have yet to buy a replacement phone for that number. Pretty poor business ethics to say the least.

  4. I would like a class action lawsuit. This is ridiculous. I've tried to explain my cost concerns to the ATT chat person .. and I only get a "duh" ... they just don't understand.
    I was paying about $160 per month. Now we are up to $250 .. and I want to update my phone ...these are only for the two of the four phones we have. My phone I want to go with a two year contract, free phone. Paying $15 month for the phone line. But if I want to update to the so called free phone, I will have to increase my rates to $40 per month.

    Why, if I'm simply rolling my contract for another two years?? Free phone .. and I have to pay an extra $25 per month? Stick it ATT!! Weve been customers for over 10 years. This is how we are treated??

    1. FYI I was told before that AT&T does not care about customer they already have they only want Happy new customers... Anyone ??? Ummm Hello AT&T if you continually piss off your current customers we will be telling everyone and NO ONE will come onboard as a Happy New Customer !!! I think it is time to see what Verizon is like at least I will be a New Customer and have everything thrown at me woohoo !!

  5. I totally agree! This is SO frustrating! They won't budge,so I'm going to have to switch to another company!

  6. AT&T bait and switch program. Don't fall for it. Been a loyal customer since 2002. Last year when I renewed my 2 yr contact they offered me mobile share value plan. Up to 4 lines for $160. Was a good deal so I took it. What they don't tell you is when you renew or upgrade your plan goes up a minimum of $400 a year. Was looking to replace My sons phone. He has an iPhone 5s. Does not want a 6. Just a new 5s. (His screen is shattered) options are $49 to replace plus a plan increase on just his line of $25 a month or outright buy the phone for about $600. Or buy into one their ridiculous next plans for about $600. So when i have to upgrade my other 2 lines it will be an additional $50 per month. How crazy is that? Spent two hours on the phone with them. They don't care that I've been a customer since 2002. Or that they are losing 3 customers. Looking to switch carriers right away. Probably t-mobile. And looking to join a class action lawsuit for this bait and switch plan. Please feel free to share if you've experienced this. Let's get the word out about AT&T's deceptive practices

    1. I agree with you. My wife and I had the grandfathered unlimited data plans. The family share plan was much cheaper, so we switched. My wife preordered her iPhone 6 through apple. Didn't know her line rate was going to go from 25$ to 40$ a month. Plus she paid $300 for the phone with a two year service agreement. Had we gotten her phone through the next plan there wouldn't have been a rate hike but an additional $20 a month for the phone. So around $46 a month with no money upfront except the sales tax. So, $6 more a month to not own the phone right away. $144 more minus the $300 upfront. Well that is a ripoff. The agent at att said people would be upset if there wasn't a 2 year agreement plan still. How noble of them. They would rather steal my money upfront and not tell rather than me freaking out about no longer having a 2 year service agreement

  7. I too have been with ATT for 10 years. Now this is one of the highest bills in our household due to their NEXT plan. I am eligible for a "free" phone if I renew my contract. And I already have a smartphone and 5 phones on the Family Share Plan. But I would have to pay another $25 per month to get my "free" phone ... Or $40 per month to go on NEXT plan. I feel like a class action lawsuit should be in the works

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