The Pros and Cons of Prepaid Cell Phones

Cell phones are more than a luxury, at this point, they’re practically a necessity. Since we don’t know when an emergency will occur, a cell phone can provide peace of mind, allowing you to communicate from almost anywhere at any time. But while cell phones can put our minds at ease, that can come with a hefty price tag.

If you’re tired of outrageous cell phone bills, you might consider switching from a contract to a prepaid phone plan. Going prepaid can definitely save you some money, but before you make a final decision, here’s a look at a few advantages and disadvantages of a prepaid plan.

Pros

One of the biggest pros of opting for prepaid is the ability to get a plan without signing a contract. This gives you freedom to come and go as you please, minus early termination fees. With this flexibility, if it doesn’t work out with your chosen carrier, you can simply switch to another.

Prepaid cell phones are pay-as-you-go plans. Because there’s no contract, you pay upfront for your minutes. This is a major plus because you only pay for minutes you use and there’s no risk of overage fees. These phones are not only excellent for you, but also an affordable choice if you’re thinking about getting your preteen or teenager a phone. These phones are also perfect if you’re looking for cellular service, but aren’t a heavy phone user.

Because there’s no contract with a prepaid cell phone, there’s also no credit check. If you don’t want a credit inquiry driving down your credit score, or if you think bad credit might prevent you from getting a phone contract, a prepaid phone is the way to go.

Prepaid cell phones have come a long way, with many major carriers offering their own version of pay-as-you-go. This serves to your benefit because you’re able to compare plans and choose the one that works for you. Prepaid services are available through Sprint, Boost Mobile, MetroPCS, Virgin and more.

Cons

Monthly rates with a prepaid plan are typically cheaper than a contract plan—but only if you don’t use a lot of minutes. On the contrary, if you’re a heavy phone user, your cost-per-minute with a prepaid phone could be more than the cost-per-minute with a contract plan.

When you purchase minutes with a prepaid plan, keep in mind that your minutes will expire after 30 or 90 days, depending on the carrier. Only buy what you need to avoid spending more than necessary.

If you’re getting a prepaid plan and you prefer the newest, fanciest phone, be prepared to shell out some serious cash. When you purchase a cell phone under a contract, the cell phone carrier subsidizes the cost of the phone, which reduces your out-of-pocket expense. This provision isn’t available with a prepaid plan. If you choose a prepaid plan, you’ll have to pay the full retail price for your cell phone.

So, what’s it going to be?

When making the decision between a prepaid phone and signing a contract, you have to consider what’s important to you. If you’re looking for an “emergency only” phone, and if you won’t text or use a lot of minutes or data each month, a prepaid phone might be up your alley. However, if you’re a heavy data user and you’ll rely on the cell phone to communicate with friends and family, you might benefit more from signing a cell phone contract. With a contract, you can potentially enjoy faster internet speeds and get more minutes for your money.