Converting your AT&T contract phone to a prepaid phone is easy, provided that you are okay with partially disassembling your phone. The phone itself does not control whether it is a contract or a prepaid phone; the SIM card does. SIM cards are subscriber identity modules that identify who is using the cellular network and what plan they are under. Unless you use some feature that is specific to that phone, such as accessing the Apple app store, which only the iPhone can do, then the network never knows what you are calling from.
Buy a prepaid phone from AT&T. It does not matter which model of prepaid you buy unless your contract phone is a smartphone. In that case, you need to purchase a prepaid phone with a data plan included.
Turn off the contract phone by holding down the power button for five seconds. Ensure that the prepaid phone is also off, which it should be if you just purchased it.
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Slide the battery panels off of each phone by hand. A few phones may require that you unscrew a screw holding the cover on, but most do not. Remove the batteries from both phones to gain access to the SIM card cage. If you have an iPhone you just slide a paper clip into the SIM card hole at the top of the iPhone. It will pop the SIM card cage out.
Take the SIM card out of the prepaid phone and slide it into the cage of the contract phone. Close the cage and slide the battery back into the cell phone. Reattach the battery panel and turn the cell phone on. Your contract phone is now a prepaid phone.