What You're Actually Signing Up For When AT&T Gives You A Free Phone

With the prices of high-end smartphones increasing every year, just about everyone is looking for a good deal. If you can get a phone that typically costs upwards of a thousand dollars for free, even better. Phone carriers like AT&T know this, and that's why they offer free phone promotions to new and existing customers. 

These promotions become especially attractive if you're thinking about upgrading your mobile device with AT&T. If you've seen one of these deals and thought it was too good to be true, you might be right in a sense. While there are ways you can get a free phone from AT&T, it's not a straightforward process and comes with a lot of strings attached.

As a result, it may or may not be the best option for you — and that will depend on your individual needs, if your old phone has a decent trade-in value, and whether you're willing to get into a long-term relationship with AT&T. When it comes down to it, it's best to think of this promotion as more of a "you scratch my back, I'll scratch yours" type of situation. In the end, both parties can benefit, but you'll have to give up quite a bit to get that free phone, which many would argue isn't really free.

AT&T's trade-in requirement is one of the things that makes the company's use of the term "free phone" in its advertisements a bit questionable. We've reviewed the iPhone 15 Pro, and it's an excellent smartphone that's eligible for this offer, but they're not just giving it away for free. 

The only way to qualify for a free phone is to give AT&T the phone you're currently using, and it can't be just any old phone. AT&T will assess your phone to determine its worth, and if there are any cracks in its housing or if the screen isn't intact, that's going to lower its trade-in value. That's important because the value of your trade-in device has a direct impact on the credits you'll get toward a new device.

If your phone has a high trade-in value, you could qualify for a substantial bill credit that could significantly lower the price of the new phone. However, if AT&T decides your old phone isn't worth much, you're not going to get much of a discount. 

As part of the free phone offer, you must also sign up for an APR 36-month installment plan with 0% APR. Depending on the phone you choose, this plan will cost you anywhere from $23.06 per month to $44.45 per month. The amount you pay will be offset by the bill credits you receive based on the trade-in value of your phone.

For as long as wireless providers have offered customers free phones, they have required a multi-year commitment from them, and AT&T is no different. To qualify for the free phone offer, you'll also have to sign up for an unlimited voice and data plan and commit to it for 36 months (minimum of $75.99 per month before discounts), or if you're an existing customer, continue with the one you have to be eligible for the offer. If you cancel your wireless plan before the 36 months are up, you'll lose the remaining credits and have to pay off whatever you owe on the device.

While your data is unlimited as part of this plan, AT&T reserves the right to slow down data speeds when the network is busy. You probably only have to worry about this during peak times, but it's something to keep in mind, considering all of the requirements involved in this free phone program. 

When deciding whether this plan is right for you, you should also consider the fact that you won't have the flexibility to change carriers for a full 36 months without incurring a penalty if you're dissatisfied with AT&T's service. In contrast, with AT&T's multi-month prepaid plans, you get much more flexibility without incentives like free top-of-the-line smartphones.