To buy a new phone from AT&T at a subsidized price, you need to wait until your existing two-year contract runs out. AT&T's website provides information about your upgrade eligibility and has an online store to shop for your new device. Even if you discover you aren't eligible for a subsidized phone, you can upgrade by switching to the AT&T Next installment plan, by taking an upgrade from another line on your account or by paying full retail price for a phone.
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Check Your Eligibility
Visit AT&T's Check Upgrade Eligibility page (link in Resources) and log in to see the upgrade status of all the lines on your account. To log in to AT&T's site, use your phone number as your user ID. If you've never used the AT&T website before, you need to register a new account on the site. Any lines eligible for a subsidized upgrade display a check mark and an "Upgrade" button. Click the button to shop online for a new phone. After you pick a model, choose "2-year Contract" to pay the subsidized price plus a $40 upgrade fee. Alternatively, if you have a smartphone, install and run the myAT&T app, log in and press "Check Upgrade Eligibility."
Share an Upgrade
If a second line on your AT&T account is eligible for a subsidized upgrade, you can transfer that upgrade eligibility to the line you want to upgrade. After checking your eligibility online, click "Options" by the phone you want to replace. Select the line from which you want to take the upgrade and press "Continue" to shop for a phone. Make sure you select "2-year Contract" at checkout to receive the discounted price.
Upgrade With AT&T Next
AT&T has an alternative upgrade system for smartphones, AT&T Next, which works similarly to a car lease. AT&T Next has looser restrictions on upgrade eligibility but adds a monthly fee to your account that ends up costing more than a subsidized phone over time. Any line with a two-year contract created prior to January 19, 2014, can switch to AT&T Next after five months and one day of the existing contract. If you started a new contract after this date, you have to wait 19 months and one day to switch. To switch to AT&T Next, pick a smartphone from AT&T's online store, select "AT&T Next Installment" and choose either "AT&T Next 12" or "AT&T Next 18." After 12 or 18 months, depending on your choice, you can trade in your phone to upgrade to a new model or continue paying the installment plan for a full 20 or 24 months, respectively, to keep the phone.
Upgrade Without a Contract
Even if you aren't eligible for any type of upgrade, you can still buy a new phone from AT&T at full price. Pick a phone from the online store and choose "No Annual Contract" at checkout. This option has much higher upfront costs than buying a subsidized phone or using AT&T Next, but you can cancel your AT&T service at any time without paying a penalty. As an alternative, you can buy a prepaid GoPhone from the online store. GoPhone models tend to have much lower costs than phones usually sold with a contract, but buying a prepaid phone won't get you out of your existing contract -- you'll have two separate phone numbers, and you'll have to keep paying for your old line until the contract ends, or cancel the contract early and pay a termination fee.