Prepaid and No-Contract Cell Phones: Are They Right for You?

At CUB Connects, we often get asked which prepaid cell phone plan is the best. This is not as easy a question to answer as it might seem. There is no single phone plan that is right for everyone, and this is perhaps even more true when it comes to prepaid, or pay-as-you-go, cell phone plans. To find your best match, it’s a good idea to understand your specific cellular needs.

Why go prepaid?
Prepaid phones have a few advantages over the typical contract phone plan. The main advantage is that without a contract, you are free to stop paying for service or to move to another carrier without paying an Early Termination Fee (ETF). All contract phone plans have an ETF, which differs among carriers and may depend on the type of phone you received with your contract. ETFs can go as high as $350 if you need or want to end your contract early.

Another advantage to going with a prepaid phone is that, because you are paying for your airtime prior to utilizing it, there is no chance of getting an unexpected high-priced bill for exceeding your allotted minutes. When your minutes are up, you need to add more minutes before you can use the phone again.

Finally, since many prepaid cell phone plans offer plans that are less expensive and have smaller allotted minutes than contract plans, it allows many users who would like to have a cell phone for occasional or emergency use to have a phone without paying high monthly fees for minutes and features that they aren’t even using.

Below are three of the most common reasons why people get a prepaid cell phone:

I want a prepaid phone for emergency use only.
More and more people who haven’t had or needed cell phones in the past are getting them now. With the disappearance of coin-operated public phones, it’s no surprise that cell phones are becoming the replacement for public telecom access. Cell phones give a peace of mind, that if you need to call someone, you’ll be able to. Prepaid is a great option for an emergency phone, but it’s important to realize how payment for prepaid phones works.

When you load money onto your prepaid phone, that money has an expiration date. While this may sound unfair to the consumer, it does make some sense. Whether you use your phone or not, the wireless carrier is still keeping the phone activated and is interested in making money for that service.. Many companies will have different ranges of expiration corresponding with the amount of money you’ve put down, so it’s important to look into this when you are shopping around.

For instance, T-Mobile has pay-as-you-go plans that for $100 will give you 1000 minutes that are good for one year. They also have a $10 plan gives you only 30 minutes, but these minutes will only last for 90 days. While $100 for 1000 minutes is certainly a better deal (at $.10/minute), the 30 minutes for $10 may be less expensive in the long run if the phone is truly only used for emergency purposes With the latter plan, if you never ended up using the phone, you would only pay $10 every 90 days, or $40 a year to keep your emergency phone activated.

The above example is just to illustrate the difference; it is not necessarily the best option available for you.

It’s also important to note that any American cell phone will dial 911, as long as it has a charged battery and is in reception range, even if service has been shut off.

I want a prepaid cell phone for occasional use.

If you’re looking to have a prepaid cell phone for occasional use—that is, using it more than just for emergencies—but still not to use as your primary phone, then there are many different options to choose from. We advise you to really think about how many minutes you plan to use per month for your phone, as well as whether you plan to use text messaging or internet data, and start shopping with that information in hand. Use CUB Connects to shop for a plan (after entering in your zip code and selecting “Mobile” and “Go”, use the “Mobile Plan Type” drop down menu on the left and select “Prepaid Phone Plans”), or call our toll-free helpline at 1-855-892-4314.

I want a prepaid cell phone that works just like a regular contract plan cell phone.

Do you want to use your cell phone all the time and not worry about a contract? There are plenty of options available for this type of user. Many phone companies are offering completely unlimited (voice, text, and data) no-contract plans for around $50/month, and you can find plans for even less if you don’t need data. Keep in mind that most no-contract phone plans require that you purchase your phone up front, as that two-year contract that you would otherwise sign helps to subsidize the cost of your phone. However, in the long run, this will often be cheaper for you, as a subsidized phone on a two-year contract can very well equal or surpass the amount you would have paid had you purchased a phone with a no-contract plan.

These sound great! So, why WOULDN’T I want a prepaid or no-contract phone plan?

The main reason you wouldn’t want to go with a no-contract plan would be if you want one of the newest smartphones, or you want a smartphone and aren’t willing to pay a lot up front for it. As we just mentioned, with a contract cell phone plan, the price of the phone is subsidized by the contract, making it more affordable (in the beginning, at least) to have the newest technology in your hands. This, in turn, does make your contract plan’s monthly cost more expensive than prepaid options.

Another reason to not go with a prepaid plan is if you are concerned about your service being interrupted or if you forget to pay right on time. With a contract plan, your phone service will still be disconnected for lack of payment, but there’s usually more of a grace period than there would be with prepaid plans. Many prepaid plans will become immediately disconnected without “topping up” or adding more minutes to your phone.

In conclusion

The world of prepaid and no-contract phones can be a confusing place to navigate. Hopefully, this article has given you a little more insight into how prepaid plans work, and what type of plan is best for you. Still confused? No problem! CUB Connects is here for you! Please visit the CUBConnects website to see all the plans that are available in your area, or call us at 1-855-892-4314 to talk with one of our staff members to discover what the best plan may be for your current needs.

To keep up with CUB, like us on Facebook and follow us on Twitter!

• Share this post on Facebook.
• Share this post on LinkedIn.
• Share this post with email.

« Back