If you look at the details of the plans, you really have a couple options.
- You can sign-up for a 2 year contract and pay $200 for a smart phone and keep it for 2 years or pay the hefty ETF.
- You can buy a smartphone outright and pay $650 for the phone and save $25/month and can cancel at any time with no ETF. (assuming you are on an appropriate plan)
- You can buy a smartphone using NEXT and pay that $650 over 20 or 26 months and save $25/month and can cancel at any time with no ETF, but you have to pay the balance of the phone cost. (assuming you are on an appropriate plan). Note that AT&T does not charge you any finance charges for financing your phone over the duration of the plan.
Looking at these options, the first one you pay $200 for the smart phone + $600 more in monthly charges (totaling $800 over the 2 year contract). Using either of the last 2 options, you pay $650 for the smart phone, but don't pay more for the monthly service. In the end, the last 2 options save you $150 over the 24 month period of the contract (or $200 if you want to look at the 26 months duration for the NEXT 18 plan).
You're right, they're ripping you off by charging you $150 less over the period of 2 years than what they would have charged you for a contract phone...
