When cell phones first started growing in popularity, the only way to get one was with a long term contract. Then, companies started releasing prepaid cell phones and users suddenly had a choice. Over the years, no contract or prepaid phones have grown into a very popular market.
No Bill Shock
Prepaid means that what you pay for is what you get. There’s no chance that you’ll go over your minutes or you’ll send too many text messages and rack up extra charges. You know exactly how much you’re spending per month and you can manage your expenses accordingly. You never have to worry about getting an outrageously high phone bill in the mail because of some unforeseen occurrence.
No Cancellation Fees
Typically, companies that offer cell phone contracts require you to sign up for a minimum number of years with their service. What happens if you decide you no longer want their service or you want to switch to another carrier? What happens is that you pay an early cancellation fee that is usually $100 or more. With companies that don’t offer contracts, you are free to switch providers any time you want.
If you’re someone who spends a lot of time talking, texting or using the Internet on your cell phone, you need a plan without limits. Contract plans typically charge a much higher rate. As of this writing, AT&T’s contract plan is $69.99 per month for unlimited minutes with additional monthly fees for unlimited texting and different levels of fees for how much you use the Internet. Companies like T-Mobile offer unlimited talk, text and Internet use for approximately $50 – $55 per month.
Switch Plans without Fees
If you want to downgrade your monthly plan with a contract cellular provider, they often charge fees and it doesn’t take effect until your next rollover date. With a prepaid or no contract phone, you simply wait until you’ve used up your minutes and then decide whether or not you want to buy more. For example, if you’re on an unlimited minutes plan and you find that you really don’t need it, you can switch to a less expensive per minute plan with no additional fees and save money.
Financial Safety Net
If for some reason you get behind on your cell phone bill with a monthly service provider and they deactivate your phone, they’ll charge you for your past due balance, an early termination fee and often make you pay the difference between the original price for your cell phone and the discounted price that sold it to you for under contract. With a prepaid or no contract phone, when run out of minutes or airtime, they just shut off the phone until you’re ready to reactivate it.
Every year a growing number of cell phone users ditch their monthly contracts for prepaid plans. The no contract phone industry is growing largely because people are realizing that they can get the phones and features they want at affordable prices without being locked into a legal agreement. Before you sign on the dotted line, think about if you’re really getting the best service for your money.
About the Author: Naomi Delorme hates contracts and will do whatever she can to avoid them. When she’s not studying trends in technology she can be found following recent events at Eagle Ford Shale Texas and other shale sites.