AT&T’s $160 for 10 GB Plan

This ad could make it seem, to a reasonable consumer, that your family of four will pay only $160 a month for a phone plan that includes 10 GB of data.

Here’s the catch: Unless you’re bringing your own phones to AT&T and plan on never getting a new phone, you probably won’t pay $160 a month.

Here’s why: In most cellphone plans, the cost is split in three.

1. The cost of the plan itself — that is, how many minutes, how many text messages, and much data you want to use.
2. The cost of connecting your phones to the plan (you’ll pay more for having four phones connected than you will for having two connected).
3. The cost of the phone itself.

AT&T advertises, in this commercial, a 10 GB data plan for a family of four for $160 a month — this price includes both #1 (10 GB of data and unlimited talk and text) and #2 (connecting four devices). But it leaves out #3, the cost of the phones, and that’s an important detail.

You have to pay for that phone somewhere. In order to get that $160 a month Next price, new customers either must bring their old phones, purchase a new phones at full price, or buy new phones under a Next plan, in which you pay the full price of the phone in monthly installments spread over 20 or 26 months.

If you do the math, you see that you will spend less money overall with Next, but your monthly payments may actually be higher than with a two-year contract.