Many wireless service providers bundle smartphones into two-year contracts that keep the upfront cost of the device low, but the monthly price relatively high. Getting on a contract isn't the only way to enjoy the flexibility and capabilities of a smartphone, however. More companies are introducing prepaid plans where users purchase month-to-month service. This drives up the price of some smartphones significantly, such as the iPhone and Galaxy S4, into the $600 range. However, low-cost smartphones are more prevalent, penetrating more than half the cellphone market.
When you purchase your smartphone outright, you also aren't locked to a specific provider, allowing you to get the best deals and service on your cell phone plan. In many cases, the best plans are prepaid plans. Here are a few reasons to get your smartphone on the prepaid plan revolution.
1. Monthly Price Difference When you aren't subsidizing the cost of a device on your monthly plan, your fees drop significantly. Virgin Mobile, for example, offers a $35 plan that includes 300 minutes and unlimited data and texting, which is one of the cheapest plans on the market. Completely unlimited plans are found for $50 a month at Boost Mobile and some other providers.
Most of the big wireless service providers also have a prepaid division, although they don't advertise it as heavily as their contracts, with the exception of T-Mobile. T-Mobile is pushing their "contractless" plans as the new direction for their company, They have an interesting setup that allows for smaller down payments on high-end phones. If you choose to leave the provider or stop your service, you are responsible for the remaining balance of the smartphone. This is close to a standard contract, but it gives you a much better way out than the termination fee that other wireless providers require.
2. Flexibility If you find that your service is frustrating or customer support is nonexistent with a prepaid provider, you have the option of dropping them easily. You only pay a month at a time, so you aren't stuck with a provider that has poor service in your area or other issues. This flexibility helps keep the services competitive, as they would like to retain their current customers instead of losing them to other providers.
3. Plenty of Payment Options In addition to online and phone payments, some prepaid phone providers, such as Straight Talk, allow you to purchase refill cards at retail stores. This gives you a few options in budgeting, as you can buy several cards when you have the money so you have coverage in months when you don't.
4. Wide Cell Phone Selection Contrary to popular belief, prepaid smartphone services offer high-end phones such as the iPhone. The cost is significantly higher since you're buying the phone outright, but it's worth it when you consider the savings on the monthly fee and the hassle of being locked into a contract. You also have the option of purchasing a compatible phone through a third-party seller or auction site and simply getting the sim card for the service. Not all phones are supported on all carriers, however, so check carefully to make sure that the phone works for the prepaid company you're considering.
5. Pay Only for What You Need You might not always need a phone. If you feel you aren't getting much use out of your phone, you don't have to continue paying for it every month. Pay for it when you need it, and let the service lapse when you don't. The only big downside to this option is losing your phone number, but if you use a call-forwarding and VOIP service such as Google Voice, this isn't such a problem. You don't pay a termination fee or contract cancellation fee, so there's no reason to keep paying when you aren't using the service.
When you buy a new phone or when your current contract for your phone service ends, it pays to look into getting a prepaid plan.