What does '2 year contract price' mean? - 1

Hi! So near the end of the year i'm planning to get a new phone with ATandT because i don't like my current one, with metroPCS. I was really hoping to maybe get an iPhone 4S! However, there's a 'no commitment' price and a '2 year contract price'. I'm kind of confused on what the 2 year contract price really means because it doesn't really explain it. Does it mean you had to have a phone with a contract for two years to buy it for that price, or does it mean if you're planning on getting a two year contract? This probably seems like a ridiculous question but it'd really help.

You can buy the phone outright and get any contract you desire. Also, the iPhone 4s is way past useful, you should be looking at a 5s at a bare minimum, and a 6 is more realistic to keep for any amount of time.

A contract price allows you to pay for the phone over the length of the contract… So you make monthly payments on both your service and the phone. This raises your monthly bill obviously, but it also allows you to get a better phone if you don't have the cash to get it up front.

If you get the phone with a two-year contract, you get it cheaper because you're paying back some of the phone cost in your month-to-month bills. So, a phone that costs $500 retail might cost $100 with a new 2-year contract, because $20 of your monthly bill will go towards the cost of the phone. If you break the two-year contract, you pay an early termination fee, usually around $375 - $15 or so per month… Which covers the rest of the cost of the phone.

If you buy the phone off-contract, you pay more initially, but there's no two-year contract or early termination fee, so you can change companies at any point or start a contract for a cheaper phone later.