--- title: AT&T Knows the Days of 2-Year Contracts Are Numbered description: AT&T eliminated two-year contracts through partner retailers Apple and Best Buy. authors: - name: Brad Tuttle role: Senior Editor url: https://money.com/author/brad-tuttle/ bio: Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals. education: Columbia University School of Journalism, MS at_money_since: 2014 articles: 366 covers: - Business - Banking - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology social: - https://twitter.com/bradrtuttle - https://linkedin.com/in/brad-tuttle-834b225 former_staff: true published: '2015-06-03T16:31:47.000Z' modified: '2024-04-16T05:57:26.000Z' section: Business tags: - AT&T - fees - Smartphones - Tech - Wireless word_count: 295 canonical: https://money.com/att-contracts-subsidized-phones/ type: Article source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![150603_EM_ATT](https://img.money.com/2015/06/150603_em_att.jpg) The days of consumers being locked into two-year wireless contracts are numbered. We've known this for a while, what with the rise of [prepaid and no-contract plans](https://money.com/ten-best-cell-phone-plans/) that charge no fees when a customer cancels the service. Why worry about having to pay an early termination fee of [$100](https://money.com/4-things-you-must-do-before-you-dump-your-cell-service-provider/) to [$350](http://business.time.com/2009/12/03/cell-phone-bill-watch-introducing-the-350-early-termination-fee/) for dumping a locked-in contract when there are other, less onerous plans with service that's just as good? This week AT&T, a pioneer in locked-in wireless plans, took a big step toward their extinction. On Monday, the wireless giant eliminated two-year contracts through partner retailers [Apple and Best Buy](http://www.cnet.com/news/apple-best-buy-other-retailers-drop-at-t-phone-subsidies/). “I think it is one of those options that is going to go away slowly,” Ralph de la Vega, AT&T CEO of mobile and business solutions, explained to [Re/code](http://recode.net/2015/06/02/atts-ralph-de-la-vega-subsidized-phones-are-going-away/). The policy change is coming “not because we insist on it but because customers will choose it less often.” The disappearance of two-year contracts and their outsized early termination fees is great for consumers. But the traditional tradeoff for being locked into a two-year contract—cheaper, subsidized prices for smartphones—is disappearing as well. Some consumers probably think of this as a negative, but in reality it is not. When you [run the numbers](https://time.com/3732923/cell-phone-plans-two-year-contract/), it becomes apparent that a subsidized cellphone with a contract costs more in the long run compared to pretty much any other option out there today. Sure, the subsidized option initially costs less out-of-pocket. But the tradeoff for that cheaper upfront price is higher monthly bills. Virtually [every analysis](http://www.wsj.com/articles/kill-the-wireless-contract-buy-your-own-phone-1424807865) comparing contract vs. non-contract plans points out that when you look at total costs over two years or more, it almost always makes financial sense to skip the contract. 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