How to Buy a Smartphone: Understanding No-Contract Smartphone Plans

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T-Mobile killed carrier contracts and paved the way for their complete eradication. With contracts, so too goes the subsidized smartphone pricing we were all used to paying. All of a sudden that $200 iPhone is now $700.

T-Mobile Press Event - Un-carrier 4.0

T-Mobile killed data contracts in 2013. The other carriers have followed.

So with freedom comes choice, which can be confusing. Carriers now offer month-to-month plans with varying data allotments. Also, if you can’t pay the full amount of the smartphone you want up front, carriers offer payment plans that divvy up the cost into monthly installments that are then added to your overall bill. The good news here is that once you are done paying for the smartphone, you can count on your bill going down (assuming you don’t want a new one). Or, if you have a compatible smartphone you already like, thank you very much, you can use that as well and just pay for the data.

For purposes of clarity, the information provided below lays out your monthly payment expectations for service only – not including any fees and taxes that invariably find their way to your monthly statement, or any device payments.

Current Individual and Family Data Plans

Individual data plans are ideal if you have one phone and don’t need to share your data with anyone else – although some of the carriers still allow you to share the wealth with your other devices, such as tablets and smartwatches. The only outlier here is T-Mobile, which doesn’t allow you to share your data and requires you to sign up for a separate (albeit slightly cheaper) plan to add a tablet or other device to your account with its very own dedicated data.

As stated earlier, bear in mind that your bill will vary due to additional fees and taxes. The examples we’ve outlined below are for no-contract plans that don’t factor in anything else you’ll pay for fees and taxes, or additional bucks you’ll spend to on phone installment plans. These are strictly month-to-month plans that you can exit at any time if you decide to take your business elsewhere. The costs include the actual data allotment charge and any “access fees” carriers tack on for devices, well, accessing the data.


As with most of the others, AT&T’s plans are simple to understand if you think of it this way: you pay for your monthly data, and you pay an “access fee” for each device using that data directly. On plans of 5GB or less, the monthly access fee is $25 per phone. That drops to $15 per month when you sign up for a data plan of 15GB or higher. AT&T doesn’t offer any specific family packages. You can add up to 10 lines total on any given plan. All plans include unlimited talk and text time in the US, Canada, and Mexico. Here’s how AT&T’s monthly data plans break down for individuals.

  • 300MB: $45/mo. ($20 for data, $25 monthly line access fee.)
  • 2GB: $55/mo. ($30 for data, $25 monthly line access fee.)
  • 5GB: $75/mo. ($50 for data, $25 monthly line access fee.)
  • 15GB: $115/mo. ($100 for data, $15 monthly line access fee.)
  • 20GB: $155/mo. ($140 for data, $15 monthly line access fee.)
  • 25GB: $190/mo. ($175 for data, $15 monthly line access fee.)
  • 30GB: $240/mo. ($225 for data, $15 monthly line access fee.)
  • 40GB: $315/mo. ($300 for data, $15 monthly line access fee.)
  • 50GB: $390/mo. ($375 for data, $15 monthly line access fee.)

Once again, a family or group of individuals can share in any plan. For examples roommates sharing a 15GB plan would be charged $130 per month ($100 for the data, and $30 monthly line access fee).

AT&T Unlimited data

That’s not all. Data from your chosen plan can be shared with other devices, outside of smartphones. The limit remains at 10, and includes tablets, wearables (smartwatches), laptops, notebooks and hotspots. Smartwatches get access not only to the shared data, but also to unlimited talk and text.

AT&T charges a $10 monthly access fee for wearables as well as “tablets, gaming and connected devices,” and a $20 monthly access fee for laptops, netbooks, and hotspots.

Keep in mind, this only includes LTE- and data-enabled devices. You won’t be charged for laptops and tablets that connect over Wi-Fi, or smartwatches that tether to smartphones via Bluetooth.

Data overages are billed at a rate of $20 for every 300MB on the 300MB plan, and $15 per 1GB on all other plans. Unused data automatically rolls over to your next billing cycle with no cap, however it expires after one billing period.

AT&T Smartphone Payment Plans

While no longer offering 2-year contracts at subsidized prices, AT&T does give you the option to make monthly installments on smartphones if you don’t want to pay the full amount up front. Credit approval is required, but no interest is charged. All four installment plans require a $15 activation fee, and if you terminate your service before the phone is paid off you’ll owe any remaining balance. There are four plans to choose from, each with different payoff time frames:

  • Next 24: Zero down, 30 monthly installments, with the option to trade in and upgrade after 24 payments.
  • Next 18: Zero down, 24 installments, with the option to trade in and upgrade after 18 payments.
  • Next 12: Zero down, 20 installments, with the option to trade in and upgrade after 12 payments.
  • AT&T Next with Down Payment: 30 percent down. The number of monthly installments and the option to upgrade is dependent on the price of the phone you choose.


Sprint’s individual data plans run the range from 1GB per month up to 40GB. A low-cost Unlimited plan is also being offered for a limited time. Sprint is also offering a deal that will half your T-Mobile, Verizon, or AT&T bill until 2018 if you switch your number over to Sprint.

Sprint unlimitedOutside of any deals, here’s how much each of the offered Sprint individual plans will run you, not counting any additional monthly taxes and fees.

  • 1GB: $40/mo. ($20 for data, $20 monthly line access fee.)
  • 3GB: $50/mo. ($30 for data, $20 monthly line access fee.)
  • 6GB: $65/mo. ($45 for data, $20 monthly line access fee.)
  • 12GB: $80/mo. ($70 for data, $20 monthly line access fee.)
  • 24GB: $100/mo. ($80 for data, $20 monthly line access fee.)
  • 40GB: $120/mo. ($100 for data, $20 monthly line access fee)
  • Unlimited: $95/mo. ($75 for data, $20 monthly line access fee.) This price is active as of this writing. Sprint is currently running a special for Unlimited data that may not be available for long, so jump on it while you can.

Sprint’s Family Share Pack lets you share your data with up to 10 other devices you own, but as is the norm with all of the major carriers, you’ll have to pay an extra service charge for each line or device you add. Tablets must be Sprint compatible to add to your shared data plan. Here is the breakdown for how much you’ll pay Sprint to share your data with additional devices, by plan and device:

  • 1GB: $20/mo. per phone, $10/mo. per tablet. Smartwatch connectivity is free.
  • 3GB: $20/mo. per phone, $10/mo. per tablet. Smartwatch connectivity is free.
  • 6GB: $20/mo. per phone, $10/mo. per tablet. Smartwatch connectivity is free.
  • 12GB: $20/mo. per phone, $10/mo. per tablet. Smartwatch connectivity is free.
  • 24GB: $20/mo. per phone, $10/mo. per tablet. Smartwatch connectivity is free.
  • 40GB: $20/mo. per phone, $10/mo. per tablet. Smartwatch connectivity is free.

Unlimited: $45/mo. for the second line, $30/mo. for the third, $0/mo. for the fourth line, and $30/mo. for the fifth through tenth line. Tablets are $10/mo. and smartwatch connectivity is free.

If you max out your allotted data, you aren’t charged any overage fees, but your speed drops down to 2G. Sprint doesn’t offer data rollover, with the exception of its prepaid plans. Sprint’s first-time activation fee is currently $30 per line.

Sprint Payment Plans

If you’re interested in a payment plan, Sprint gives you the opportunity to make 24 monthly installments on their smartphones. The amount you’ll pay depends on the cost of the phone you’re buying. Credit approval is required. If your credit is in good standing, you can sign up for an installment plan with no money down. If your credit rating needs help, Sprint will still offer you an installment plan but you may have to pay as much as $400 down, depending on the cost of the smartphone. The good news is that both options charge no finance fees. You’ll also be able to upgrade once you’ve paid your phone off. If you decide to switch to another carrier before you’ve paid the bill in full, you’ll owe the remaining balance. Eligibility to upgrade depends on the smartphone and plan you choose. The standard $36 activation fee applies. Sprint also lets you make a down payment to lower the amount of your monthly installments, but this is available only for in-store purchases.

Leasing is also an option offered by Sprint, but only select models can be leased. The average lease term is 24 months. Leased smartphones require a lower monthly payment, and once the lease term is up you can opt to buy the smartphone for the balance remaining, exchange it for a new leased phone, or continue to lease month-to-month.

According to Sprint, new and existing customers can still lock in a 2-year contract with a discount on certain flagship smartphones. However, this jacks up the line access fee by $25 per connected phone on all but the Unlimited plan, where it is a flat $25 fee per connected phone.


Individual “Simple Choice” 4G LTE data plans for T-Mobile start at 2GB and go all the way up to Unlimited. There are no overage fees if you exceed your data limit, however on all plans with data caps, exceeding your allotted data will cause speeds to throttle down to 2G. T-Mobile also doesn’t charge additional monthly access fees – at least not on the surface, claiming that the fee is built into the plan. All plans include unlimited talk and text. Here are how the individual data plans are priced.

  • 2GB: $50/mo. (Monthly access fee built-in.)
  • 6GB: $65/mo. (Monthly access fee built-in.)
  • 10GB: $80/mo. (Monthly access fee built-in.)
  • Unlimited: $95/mo. (Monthly access fee built-in.) This includes the ability to use your smartphone as a mobile hotspot, with a limit of 14GB per month before throttling takes you down to 2G. Otherwise, there are no limits to the amount of high speed data you can consume on your smartphone with this plan.


Data can’t be shared with other devices, like tablets and smartwatches. In order to get service for your tablet or other mobile device, you’ll have to add service for your desired device by taking on a family plan. The maximum number of lines you can add to a T-Mobile plan through the online storefront is 6 – any more, and you’ll have to get on the phone with T-Mobile to make arrangements. Here’s how much you will pay per phone, by plan:

  • 2GB: $50/mo. for the first line, $30/mo. for the second, and $10/mo. for additional lines up to 6. (Monthly access fee built-in.)
  • 6GB: $65/mo. for the first line, $45/mo. for the second, and $25/mo. for additional lines up to 6. (Monthly access fee built-in.)
  • 10GB: $80/mo. for the first line, $60/mo. for the second, and $40/mo. for additional lines up to 6. (Monthly access fee built-in.)
  • Unlimited: T-Mobile is offering an unlimited family plan as of this writing for $50 per month per line for the first three lines, with the fourth line free. Outside of the promotion, Unlimited costs $95/mo. for the first line, $75/mo. for the second, and $55/mo. for additional lines up to 6. (Monthly access fee built-in).

The cost of adding a tablet varies. Customers purchasing a device through the T-Mobile Equipment Installment plan save $10:

  • 2GB: $20/mo. ($10/mo. for those that maintain a qualifying phone line.)
  • 6GB: $35/mo. ($25/mo. for those that maintain a qualifying phone line.)
  • 10GB: $50/mo. ($40/mo. for those that maintain a qualifying phone line.)
  • 14GB: $65/mo. ($55/mo. for those that maintain a qualifying phone line.)
  • 18GB: $80/mo. ($70/mo. for those that maintain a qualifying phone line.)

As a side note, T-Mobile is currently running a special offer for tablets that gives you 200MB of data free, per month, for as long as you keep the account active (and, presumably, paid on time).

T-Mobile’s free streaming benefits serve to increase its appeal. “Music Freedom” lets you stream music from services like Pandora and iTunes Radio without cutting into your data. For video lovers, T-Mobile also now offers “Binge On,” which allows you to stream video from third party services like Hulu, Netflix, and HBO NOW without eating away at your data. This is available for plans from 6GB on up. At present, T-Mobile is the only carrier that offers free streaming of music and video on certain platforms.

T-Mobile’s Data Stash feature lets you roll unused data over for up to 12 months. According to the fine print, rollover tops out at 20GB of unused data. Data Stash is available only for plans 6GB and higher.

T-Mobile Payment Plans

Customers are no longer offered the option to sign up for traditional 2-year contracts to get flagship smartphones at lower subsidized costs. But if you’d like to arrange to make monthly installments on your smartphone instead of paying the full amount up front, T-Mobile gives you options. T-Mobile’s EIP (Equipment Installment Plan) is available in 24 monthly installments, and includes a $15 activation fee per phone. No interest is charged on installment plans if you’ve got good credit, but you may be charged an annual percentage rate (APR) if your credit rating is poor. As always, credit approval is required. Customers with good credit can sign up to pay for their smartphones in monthly installments with zero down, but those with less-than-desirable credit may have to fork over a hefty chunk. If you opt to terminate your service with T-Mobile before the phone has been paid off, you will have to pay the balance remaining on your device.


Offering a cleverly named range of plans that run from Small to XXL, Verizon data plans all come with unlimited talk and text. You can share your data across other devices (the family plan), but as usual you’ll have to pay extra per device – $20 per month per phone, $10 per month per tablet or hotspot, and $5 per month per connected devices like smartwatches. Data overages are billed at $15 per 1GB. Verizon charges a one-time $20 activation fee on new devices.

Verizon plans

Verizon individual and family data plans cost the same per phone, per data allotment. Here’s a breakdown for how much you can expect to pay per month on a Verizon plan, by phone and by data package:

  • 1GB: $50/mo. ($30 for data, $20 for monthly line access.)
  • 3GB: $65/mo. ($45 for data, $20 for monthly line access.)
  • 6GB: $80/mo. ($60 for data, $20 for monthly line access.)
  • 12GB: $100/mo. ($80 for data, $20 for monthly line access.)
  • 18GB: $120/mo. ($100 for data, $20 for monthly line access.)

Verizon is currently offering a bonus 2GB per month per phone on the 12GB and 18GB plans.

Adding phones and supplemental devices like tablets, hotspots and connected devices is simply priced. Here’s how Verizon breaks it all down:

  • Additional phones: $20/mo.
  • Adding a tablet or hotspot: $10/mo.
  • Adding a connected device: $5/mo.

Verizon Payment Plans

As with all other mobile carriers, Verizon gives you the opportunity to get a smartphone on a payment plan so you don’t have to fork over the entire balance at the time of purchase. Verizon’s monthly device payments require a 24-month agreement, during which the cost of your phone will be spread out over monthly payments. There is a one-time $20 fee when you activate a new line under this option. If your credit rating is good, you can sign up for Verizon’s installment plan with no money down and a zero percent APR. Customers with poor credit can still sign up for the installment plan at no interest, but will be required to put a sizable down payment on the smartphone. The amount of the down payment depends on the smartphone’s retail value.

Following T-Mobile’s lead, Verizon no longer offers new customers the option to sign up for 2-year contracts that deliver their flagship smartphones at discounts – however, for the time being, they are continuing to offer this service to their existing customers.

If you decide to switch carriers before you’ve paid off your smartphone, you will have to pay the rest of the balance in full. The same goes for upgrades – if you decide you want to trade up before the balance of the smartphone has been paid in full, you’ll have to make up the difference before you can make the switch.

How Much Do Smartphones Cost?

For those looking to pay off a smartphone in interest-free installments, expect to payments to exceed $20 per month, which will be tacked on to your monthly bill. For example, AT&T charges $695 for the new Samsung Galaxy S7, which breaks down 30 monthly payments of $23.17. Verizon charges $672 for the same smartphone, which breaks down to $28 per month over 24 months.

phone prices


Join the club. The cynic would think carriers purposefully offer slightly different plans from one another in order to make comparison shopping difficult. But there is a way to cut through the confusion and find the best plan for your needs.

Start with carrier coverage. Find out how well each carrier performs at home and at work. Don’t rely on carrier coverage maps solely, because there are dead spots hidden within those large swaths of color. Check with neighbors and neighborhood social networks, like Nextdoor. You can also return smartphones within a few days should you find the coverage lacking, though you may get hit with a restocking fee.

After that, figure out your specific needs: number of lines and total expected data consumption. As we will outline in the next article, there are plenty of easy ways to check how much data you’re actually using through apps and smartphone settings.

Looking at the prices and balancing out access fees while disregarding any current promotions as of this writing, T-Mobile has the best individual rates for single users averaging less than 6GB of data consumption per month, and some of the cheapest family rates for those that consume low to moderate amounts of data. Otherwise, one of the other carriers has the best specific plan for your needs.

That aside, this is a highly competitive and saturated market. To gain customers, the big four can’t rely on attracting new users upgrading to smartphones for the first time. They have to steal customers from one another, attracting with special deals and great offers. That’s great news for consumers.

Want to learn more about buying a smartphone? Read all about network technology, including LTE, GSM, and CDMA. And then read all about picking the right smartphone plan. Finally, learn all about smartphone specs, the differences between iOS and Android, recycling your smartphone, and buying an unlocked smartphone.




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