Not All Cellphone Plans are Created Equal

May 7th 2016

Three distinct types of cellphone plans are available, each offering an individual set of advantages. These are contract, pay-as-you-go and prepaid plans. Depending on a user's individual needs, each plan has potential benefits and drawbacks. For instance, pay-as-you-go plans are beneficial for users that only need to use a cellphone during specific periods of time, rather than on an extensive daily basis. This plan does not require a commitment, and usage is purchased in advance. Additionally, each plan has different pricing, features and usage options. Some plans also offer individual, family and no-contract options.

Pay-As-You-Go Cellphone Plans

Pay-as-you-go plans are individual plans with no contract. This plan typically does not offer multiple lines or a family plan. Pay-as-you-go plans accommodate light usage most favorably. While they offer unlimited talk, text and data, this option is generally more expensive than prepaid or contract phone plans. This plan does not have certain parental controls or GPS functionality. Smaller carriers may offer a limited coverage map. T-Mobile offers a popular pay-as-you-go plan that consists of a $3 per day unlimited talk, text and data option, as of 2015.

Prepaid Cellphone Plans

The prepaid cellphone plan is ideal for users who require extensive usage without the commitment of a contract or service agreement. This type of plan offers unlimited talk, text and data options that can help users save money when compared to contract plans. A popular prepaid plan is the Sprint $60 Unlimited Plan, which provides unlimited talk, text and data. While prepaid plans are cost-effective alternatives to contract plans, they lack family plan capability and certain parental controls. This type of plan may also lack adequate coverage in specific locations. Prepaid plans do not offer certain benefits of contract plans, including insurance, device upgrade and less expensive devices.

Contract Cellphone Plans

The length of a contract plan is typically 24 months. This type of plan offers individual and family options that are ideal for users with children. The plan has parental controls, GPS functionality and available data on a line-by-line basis. Contract plans offer savings on the initial price of the device and provide insurance that protects the device in case of an accident. This type of plan also allows users to upgrade to newer devices. However, the monthly charges are more expensive than prepaid plans. Contract plans are offered by major carriers such as T-Mobile, Verizon Wireless, AT&T and Sprint. This type of plan typically features a larger coverage area and newer devices.

When selecting a cellphone plan, it is important to understand individual need. Pay-as-you-go plans are ideal for users with light requirements. Prepaid plans, on the other hand, are better suited for users that require extensive options, but who do not want the commitment of a contract. Contract plans are best for families and users that want insurance, available upgrades or less expensive devices.

Sources

electronics.howstuffworks.com "How Prepaid Cell Phones work" http://electronics.howstuffworks.com/prepaid-cell-phones1.htm
kiplinger.com "Best Cell-Phone Plans for Every Type of User" http://www.kiplinger.com/article/spending/T057-C000-S002-best-cell-phone-plans-for-every-type-of-user.html
whistleout.com "" http://www.whistleout.com/CellPhones/Cell-Phone-Plans-Buying-Guide

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