unlocked or locked

Sorry if this has been addressed already. I want to get a new phone for my wife. We are both AT&T customers. I recently purchased the Captivate from AT&T with a 2 year contract. Her phone, I believe, is not under contract anymore. I don't know what she has, but it is not a smart phone. I think it is an older flip phone.
Anyway, she wants a Samsung touch phone that she can transfer her existing SIM card into it and just upgrade services, if necessary, to accommodate the new phone.
I thought about purchasing an unlocked android phone for about $100 or more, and then putting her sim card in it. My son-in-law said that I would never recoup the money spent out-of-pocket in this scenario. He suggested that I purchase a refurbished or discounted smart phone from the carrier (AT&T) and take a new contract out on it.
I understand that buying my own phone is an out-of-pocket expense, but couldn't I break even with not having to get a new contract? Maybe I'm not seeing the forest for the trees. Can someone clear this up for me, if possible?

Thanks!

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› See More: unlocked or locked

Your service cost the same whether you have a contract or not. Locked versus unlocked makes no difference. The operative term is branded versus unbranded. AT&T will treat a phone issued by it the same regardless of the locked status. Unbranded phones might not be treated as smartphones even if they are. You could then save money on the features. If you are planning to stay with a particular carrier, it makes no financial sense to pay full price for a phone. Let's say that you bought a phone for $400, you still would pay the same for a voice plan or data plan if you got a free phone. The carrier recovers its discount by the revenue it receives for your continued voice service. If you paid full price for a phone you would be permanently out of the difference in price between what you paid for the phone and what the carrier is charging for the phone under contract.

thanks. I would say more, but the last 2 times I tried to reply, my replies did not post. I don't know what happened. So, thanks for the info.