Until recently, prepaid mobile plans got you a basic feature phone with limited coverage options. But now there’s several options to get the newest Android or iPhone that’s contract-free, and on a reliable network. While the phone does cost more upfront, the savings over a two-year period are remarkable.
In the US, consumers seem to be attracted to getting shiny new devices on the cheap or even free. Even if it ends up costing a lot more over time. But that trend could be changing. T-mobile is championing the idea of prepaid mobile devices and service. In fact, a lot of prepaid services like T-mobile, Ting, and others allow you to bring your own device. There’s no outrageous early termination fees, and the monthly pricing is a lot more straight-forward too.
Check out our article on how much money you can save by switching to a prepaid plan. You might be surprised to learn you could end up saving from $600 per year for a individual plan, to upwards of $1,500 for a family.
What’s your take? Would you consider switching to a prepaid plan after your two-year contract is up?
26 Comments
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Steve Krause
June 12, 2013 at 8:33 am
For sure. Both my phones are now off contract so as soon as I get a free weekend I’ll be moving my phones over to pre-paid.
As Austin wrote in his full write-up, there really are no disadvantages plus you get unlimited data and… it’s less expensive. :)
Downside?
Brian Burgess
June 12, 2013 at 4:25 pm
I don’t see any downsides other than you might not have the absolute latest greatest phone the day it comes out. I know that’s important to some people, but, not me.
It’s crazy to think about the amount of money that’s saved. But people look at the upfront price.
iPhone 5 $45! So that’s an impulse buy right?
Then the afterthought is the two-year contract, hidden fees, early termination fees, data throttling…etc.
Not to mention the annoying Credit Check that is done just to qualify for the scam contract. In today’s economy …
DLMinton
June 12, 2013 at 10:05 am
My T-Mobile deal is perfect for my needs ($100/mo).
Rural CT is out of T-Mob coverage area but T-Mob partners w/ATT which serves our hilly neck of the woods. As I travel from town to town here it switches from one to the other quite seamlessly (with some exceptions). I suppose that would be problematic if you needed to use extensive data MB’s while “roaming” but my Phone is primarily used just as a “hand terminal” to test my websites’ functioning on smartphones and it lives on wi-fi 90% of the time.
However, I need to keep my antique flipphone Verizon prepaid functioning ($15 a month), for emergency road calls, since ATT’s coverage here in the hills is spotty, but I refused to enter into a contract with either of those bandits just to get an iPhone, so I had waited a very long time to confirm that my sites’ code DID work well on mobile devices.
Brian Burgess
June 12, 2013 at 4:18 pm
I have been doing prepaid for years. I don’t think I have ever had a contract for a cell.
Of course every person’s situation is different and needs vary, but I don’t need a ton of computing power on the go, so having the latest greatest smartphone isn’t as important for me. Since I work out of my home office, having powerful computing power here is more important than on the go. As long as I can get data and the occasional phone call, I am good.
Even if I did want the latest and greatest device, I mean, you can get them from prepaid services … T-Mobile has the iPhone 5 and Samsung Galaxy S4 on T-Mobile or I can get an unlocked phone and bring it over to virtually whatever provider I want.
Yes, it costs more to buy the device upfront, but the money you save over time is insane.
Not to mention how easy billing is. For instance right now I have an LG Android 2.3.7 smartphone with Virgin Mobile and I pay $35 a month for unlimited everything.
and that is honestly more than I need anyway … I can do what I need over WiFi 80% of the time anyway.
Those are just a few reasons I am perfectly happy with prepaid service and advocate it to my friends and family.
K.G.
June 13, 2013 at 10:50 am
Brian, I think the $35/Mo Virgin Mobile is not unlimited everything — I think it has a 300 minute talk-time cap. Personally, I like Straight Talk – I brought my own Nexus 4 over to them, and I get Unlimited Talk, Text, and Web/Data for $45/Mo. Actually it is LESS than that = you can buy a full year up front for $450, which is about $38/mo (I think it ends up being $42/mo with taxes TOTAL). Nice price, nice phone, and nice coverage!
They used to have T-Mobile and AT&T as their providers, but AT&T is not currently available (unlss you already bought the AT&T sim card, before they were discontinued). Now you can only get T-Mobile coverage with Straight Talk.
I have used them for months, with no hitches (average data user, heavy phone user).
Brian Burgess
June 13, 2013 at 11:02 am
Yeah, you’re right it isn’t unlimited talk, but data and messaging is unlimited — and to be honest I don’t know if they throttle after a while. Of course I only get 3G so it really doesn’t matter — it’s painfully slow.
I guess for what I need, it fits perfectly for my data use and I rarely talk anyway.
Straight Talk is only T-mobile coverage now with a new phone huh? I was actually thinking about switching to Windows Phone 8 with them, but T-mobile coverage out here in the sticks is sketchy at best. Verizon is solid though.
K.G.
June 13, 2013 at 11:56 am
They may also have Verizon — not sure. They do allow you to bring a CDMA phone as well, but that is new from when I signed on. They do have 4G with T-Mobile (and AT&T, if you have the no-longer-available SIM card they used to see — e-bay may have them for an exhorbitant price).
They are an MVNO reseller for all these companies (T-Mobile, AT&T, etc), so they don’t have their own towers. See this link for more info: http://straighttalkbyop.com/ (also, http://www.straighttalk.com). I do enjoy the savings!
Bogdan Bele
June 13, 2013 at 3:29 am
I’ve always had contracts, because it used to be cheaper than prepaid when I started using a cell phone. Lately, I don’t have much of an advantage of keeping a contract, but I’m still tied to it for another year, after which I’ll certainly go prepaid. The only disadvantage is that you don’t get unlimited data (but you can still get it cheaper than on a contract).
Brian Burgess
June 13, 2013 at 4:04 am
You don’t get unlimited data in Romania? Do you end up getting as much saving there as we do in the states?
Bogdan Bele
June 14, 2013 at 7:50 am
There are some unlimited data packages, but the normal ones are much cheaper, too.
Nathan Berry
June 13, 2013 at 8:30 am
I would switch and I have switch. I am currently using Straight Talk for my phone and will be switching my wife from Verizon as well. I was paying about $90 / month and my wife currently pays about $120 / month. When fully switched over to Straight Talk we will be $100.08 / month combined for the same coverage and service as I had with AT&T. Not the best, but well worth the cost and the savings per month.
I will never use a regular contract cell service again.
Steve Krause
June 13, 2013 at 11:49 am
Does Straight Talk have its own towers or does it use the AT&T towers?
K.G.
June 13, 2013 at 11:58 am
Straight Talk is an MVNO reseller for all these companies (T-Mobile, AT&T, etc), so they don’t have their own towers. See the post I just sent to Brian B, for more info….
Konrad Poth
June 13, 2013 at 8:34 am
When it comes to actual telephone usage, I’m deaf, and use text only – hence the iPhone. I managed to score a half-way decent data-only plan with Verizon, but even that is much more than it should be. Among others, Walmart has some interesting prepaid plans, including $45 per month unlimited everything! I’m just a little concerned about the usability scope, Verizon being the only one that reaches me out in the country.
But I definitely agree – prepaid, with your own device, is the only financially astute way to go.
Robert
June 13, 2013 at 8:40 am
My wife entered into a 2 year contract with SPRINT for a family plan (5 numbers). She works for a hospice here in South Florida, and gets a 20% discount on the plan only, so instead of $110.00 a month, we pay $75.80. All the hotspot add-on and premium data charges, etc., bring the total each month to around $225.00. On a yearly basis, that’s $2,700.00 for 5 lines. Your chart shows $6,900.00 for a 4 line family, and is an increase from one line of about $1,300 per line per month, on average. Just for the sake of guessing, if it goes to $5,500 a month for 5 lines, and we ignore our discount – adding the $75.80 back in – we pay about $300.00 a month for our 5 family lines. That’s $3,600 a year, which is a far cry from $5,500 a year, no? How does pre-paid stack up against that number? Thanks.
Tenika
June 13, 2013 at 8:42 am
I’ve been seriously considering prepaid for my family for a while now. I have a family plan with AT&T for 4 lines which includes 3 iPhones. My and my husband’s lines have managed to hang on to our unlimited data plans but my other iPhone line has a limited plan that is costly, plus my youngest child is ready for an iPhone now which would be another $20. We also have to have an unlimited text messaging plan that we share. 3/4 of our lines are out of contract and I’m beyond fed up with AT&T nickel and diming us for every little thing and the horrible customer service. The Big 3 cell providers are getting too big for their britches with their ridiculous pricing, mandatory data plans for smartphones and general tomfoolery. Consumers need more options and, for now, prepaid is something to consider.
Jeffrey
June 13, 2013 at 10:03 am
I have one year to go with AT&T and will make the switch then.
Steve Krause
June 13, 2013 at 11:57 am
Curious Jeffrey — Was the switch a plan before or after you read Austin’s article? ;)
Peter
June 13, 2013 at 11:57 am
When my AT&T contract expired, I first went with T-mobile’s prepaid, but their minute rates were outrageous – unless you prepaid a high amount, which you then had to use within a certain time.
Then I switched to Airvoice Wireless, which runs on AT&T’s network so I’m comparing apples to apples again. Only now I pay 4 cents per minute, 2 cents per txt, and if enable data it’s 33 cents/mb. (But it’s rare I need it – wifi is often readily available).
I’ll probably never buy a phone with a 2-year contract again. It seems you pay for it twice.
Steve Krause
June 13, 2013 at 12:02 pm
Nice — what part of the country are you in?
Peter
June 13, 2013 at 12:04 pm
Steve: Scottsdale, AZ.
PrepaidWirelessGuy
June 13, 2013 at 2:01 pm
Prepaid has actually come a long way. You can actually get some of the latest phones on prepaid at the same time as postpaid. The selection is vast. You may not have every option of smartphones that you have on postpaid, but it’s pretty darn close, and that gap is continuing to close.
The only downside is that most prepaid carriers don’t have access to ancillary roaming partners. So a Sprint MVNO (for example), or their own prepaid brands (Virgin and Boost), don’t have access to roaming partners (ex. Verizon) when out of Sprint coverage. Depending on where you live, work, and play, that may or may not be an issue for you. Coverage these days is so good, that unless you’re in a fringe area, it really shouldn’t be a problem. In addition, prepaid providers are getting more sophisticated with their roaming agreements.
Postpaid is on a slow decline; expect that decline to accelerate in the next few years!
Steve Krause
June 15, 2013 at 10:20 am
When you say roaming are you talking about international roaming? I never turn on my phone when I’m roaming outside my coverage area due to the high international costs. Better to just get a local prepaid if you will be in the arear for more than a few days.
PrepaidWirelessGuy
June 17, 2013 at 1:37 pm
I meant roaming within the U.S. where the carrier doesn’t have native coverage; not international roaming.
Kate
June 17, 2013 at 7:17 am
I would love to go to a prepaid option because I am paying an arm and a leg for Verizon. But I live in NYC and have dabbled in the other carriers from time to time. Only Verizon gives consistent and reliable service in Manhattan. Does anyone else live in NYC and have a prepaid suggestion that works consistently here?
Cyndi
July 1, 2013 at 9:51 am
Late-as usual, joining a discussion, but pre-paid yes! I’ve never had a contract. I use Virgin Mobile, as someone pointed out, $35/mo. 300 minutes talk, but I rarely use them all, heavily using the unlimited data as I work and move back and forth. They are somewhat limited by using the Sprint network for coverage and though it’s good around cities, it is spotty in rural areas, including the sticks where I live. I keep my ancient Tracfone for use there if I need it for calls. Otherwise the HTC Evo switches to wifi at the house (or where ever) so I can use it that way if I wanted to. The initial cost of the smartphone may be much greater than a contract ‘special’, but the savings are enormous overall, even considering having to keep the other phone (minimum $20/3mo approx.), which really isn’t necessary if you have a land line. I just do that for convenience. In other parts of the world, prepaid is the norm.