AT&T customers have three options for upgrading their phone. You can wait until the original contract ends, subscribe to AT&Ts Upgrade Advantage service, or purchase a new phone under the "no-commitment" pricing program.
You're eligible for an upgrade every time you renew your contract. This is typically every two years. If you don't remember when you signed up or when your contract ends, AT&T will send an upgrade status text to your phone. Dial NEW# or 639# from your existing cell phone to have a free text message with your upgrade status sent to you.
The Upgrade Advantage option is added to new or existing AT&T wireless accounts. Rates and terms for the service vary depending on which wireless plan you have. If you add Upgrade Advantage to your account you can upgrade your phone every 20 months. There's an $18 upgrade fee and new two-year contract required with Upgrade Advantage as of fall 2011.
The no-commitment option allows you to buy and use a new phone on your existing account, but don't expect any discounts. Depending on the phone you purchase, expect to pay full retail price or close to it. This isn't the most economical option, but if you can't wait for a new phone it is an option.
If you have an iPhone, download the Upgrader app from the App Store to keep track of your upgrade eligibility. The Upgrader app checks your upgrade date and lets you buy a new phone or add additional services to your account straight from your iPhone. You can also use the Upgrader online at att.com/phoneupgrade.
Be aware when you upgrade your phone at contract end or with Upgrade Advantage you're starting a new contract with AT&T. Look over the new contract to make sure you agree with the length of the agreement and the services available with your plan. All your upgrades can be done online when you log into your AT&T wireless account.