Next is actually what I choose and I really don't understand why some people say it sucks. Basically AT&T gave me a 20 month interest free loan for the total price of the phone and I get a $25 a month discount on that line of the phone. If I had chosen a 2 year contract it would have been $499 upfront and $25 more monthly (plus I saved $40 activation fee).
It sucks because if you want to go to another phone before your contract is up, you have to return that phone back to them.
Plus a $499 phone, isnt just interest free divided over 24 months, the full price $949 is divided over 24 months ( if youre talking about iPhone 6 plus 128gb), so you did pay the interest, in form of paying almost twice for the $499 phone. Sure with the $499 phone you are in it for 2 years, but if you get something else, you can always sell your current phone for cash.
The $25 off the bill is the only perk , but as mentioned above only good if you have 10GB or more data plan.
the $40 activation fee you saves, is nothing compared to the sales tax you paid on the $950 full price phone, which of course you dont see cause its all just inside a payment monthly.