The Pre-Paid Cell Phone Debate

For most Americans, getting a new cell phone involves making a compromise with the provider: they give you the newest, hottest phone on the market for a discounted price, and in return you promise to pay their fees and use their service for the duration of a two-year contract. Prepaid cell phone plans, although growing in popularity among younger children and the elderly, are still far from hitting mainstream. This is not the case in Europe, where it is much more common to buy a SIM card loaded with minutes, stick it into an existing phone, and then add more minutes when necessary.

There are certainly benefits to this approach, the most obvious being that it is more flexible than a two-year contract, and – for many people – it also ends up being cheaper. If you’re a cell phone user looking to cut expenses, or if you simply are sick of the main providers and don’t want to get locked into a contract, a prepaid plan may work well for you. Here are some other questions to ask yourself

How Do I Use My Phone?

If you’re the person who needs to be constantly streaming media while simultaneously texting and talking, a prepaid plan might not be the best option. But if, on the other hand, you just use your phone for the basics – texting and talking – and you don’t do either in excess, then a prepaid plan could vastly cut down your cell phone bills. Different prepaid providers offer different plans, but many offer cards that can be bought in denominations of $10 or $15. Although these cards only allow for a limited number of minutes, you can always get a new card when an old one runs out.

Do I Need The Latest Phone?

Many moderate phone users still balk at prepaid plans, in large part because it limits the types of phones they can have. Without a contract, you will no longer get those big discounts on the newest Android or iPhone. Since paying the difference could negate any other savings gained from a prepaid plan, a customer choosing this approach will likely end up with a more basic cell phone as a result. These phones should still get the job done on the texting and talking front, but they certainly don’t carry the same cache.

What Provider Will I Use?

Many providers focus on the prepaid market, including Net10, Consumer Cellular, and Jitterburg. Between these companies it’s not too difficult to shop around and find minute plans that fit your intended use. But if you want to stick with a major carrier, some providers are better for doing prepaid cell phone plans than are others. For example, Verizon usually turns out cheaper on a contract and AT&T’s savings with prepaid are sometimes minimal. The best provider for no-contract plans is probably T-Mobile, which offers a range of prepaid options.

About The Author

Edwin is a marketer, social media influencer and head writer here at Frugal Wiz. He manages a large network of high quality finance blogs and social media accounts. You can connect with him via email here.

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