There was a time in America where prepaid cell phones had a stigma. The general feeling was prepaid service was the service of last resort for people with poor credit. There was a bit of an elitist attitude among those with contract phones that looked down their noses at prepaid phone users.
Back then prepaid carriers didn’t offer half of the bells and whistles that contract phone users enjoyed. Not only were the services no frills but the phones were too. Let’s face it; prepaid phones back then screamed “second class citizen.”
Things Have Changed
Prepaid phones and service have come a long way. It is now possible to own a prepaid iPhone, something unheard of a few short years ago.
Non-contract plans allow people to take control of their cell phone usage. If for some reason you won’t need to use your phone for a month (say, God forbid, you’re hospitalized and unable to use your phone), you can stop paying for the month and resume when you can use it again. Try doing that with a contract phone.
Prepaid vs. Contract Price Differential
The most exciting news about prepaid cell phones is that depending on your needs and usage, it might be a cheaper alternative to a contract phone. Don’t let the higher initial purchase price scare you. Where most people shy away from people prepaid is the price of the cell phone itself. Yes, you will pay more for the cell phone but in the long run your service may be cheaper if you shop around.
Verizon vs. Virgin Mobile
Just looking around on the Internet. For example, as of this writing, December 2012, Virgin Mobile offers the Samsung Galaxy II at a price of $329.99 (no contract). Verizon offers the Samsung Galaxy II Note at a price of $699 (without contract) and $299 with a 2-year contract. Granted, the two phones have slightly different features, but here’s the kicker. Verizon’s monthly estimated monthly fee is $100 with or without a contract and Virgin’s Mobile monthly fee is $70 without a contract.
Let’s do a little simple comparison:
|Phone||$299.99 with contract||$329.99 without contract|
|Monthly Service cost||$100||$70|
|What you get||unlimited talk and text and 2G Shared Data||Beyond Talk Plan: unlimited talk, text and 3.5 G with 3G/4G mobile hotspot|
So, if you go with Virgin Mobile, you pay $30 more for a non-contract phone up front, but quickly make up the difference at the $30 per month savings for phone service.
Prepaid service may not be for everyone, but the playing field seems to be tipping in favor of prepaid cell phones. Do your homework to get the best deal for your situation. Don’t assume contract phones offer you the best bang for your buck.