How to Save Hundreds or Thousands of Dollars on Cell Phone Service

Posted by Chris Hoffman on How to geek See other posts from How to geek or by Chris Hoffman
Published on Sat, 26 Oct 2013 10:40:37 GMT Indexed on 2013/10/26 15:58 UTC
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smartphone-and-money

Cell phone contracts are bad. You get a seemingly cheap phone up front, but you more than pay for the cost of the phone over two years. Prepaid phone plans are surging in North America for a reason.

Prepaid phone plans will be cheaper and more flexible than traditional contracts with big carriers for many people. However much you use your phone, there’s a good chance you can save money with a prepaid service.

No More Contracts

Here’s how cell phone service typically works in North America: You get a subsidized phone for “free”, $99, or $199. You sign up for a two-year contract and more than pay back the cost of that phone over the length of the contract. This is similar to leasing something or purchasing it on a credit card and paying it back over two years — you spend less up front, but you’re paying more in the long run.

But this isn’t the only option. You could opt for a cheaper prepaid service that doesn’t lock you into a contract. If you don’t use your phone much, you could just pay for what you use and avoid the hefty cell phone bills. If you use your phone a lot, you could get a cheaper plan, too.

Now, this certainly isn’t for everyone. If you want the latest iPhone or Galaxy smartphone every two years and require a 4G data connection, prepaid services may not be for you. On the other hand, if you don’t need the latest phone, you can save money here. You can also save a huge amount of money if you don’t use your phone much.

iphone-carriers

Phone Options

When you choose your prepaid or contract-free service, you’ll often be able to purchase a phone from them. You’ll generally be able to find dirt-cheap dumbphones and the cheapest, slowest Android phones for not very much money. If you are able to buy a top-of-the-line smartphone, you’ll have to pay the full, unsubsidized price. That’s $649 for either an iPhone 5S or Samsung Galaxy S4.

Whatever phones the service provider offers, you could always buy a phone elsewhere — for example, you could buy an unsubsidized iPhone direct from Apple and then take it to your cell phone service of choice. Most services will allow you to get a SIM card and pop it into your existing phone rather than purchasing a phone.

If you can get a hand-me-down smartphone, you can often save quite a bit of money. For example, you may have a family member upgrading from an iPhone 4S to an iPhone 5S. You could take their phone to a prepaid carrier and have a nicer phone on a cheap cell phone plan. If you brought an old smartphone to a big carrier like AT&T or Verizon, they wouldn’t give you a discount on your monthly plan. You’d have to pay the same amount of money every month as if you had gotten a subsidized phone.

Google’s Nexus phones are also great options for people looking to buy smartphones and pay up-front. Google’s Nexus 4 offered a modern, almost top-of-the-line Android smartphone experience at $299 or $349 when it came out last year. Google will soon be releasing the Nexus 5 and it’s expected to be priced at $349. That’s certainly a lot more than a cheap phone, but it’s a fairly high-end smartphone at almost half the price of an iPhone 5S or Galaxy S4. Nexus phones can be purchased online from Google’s Play Store.

google-nexus-4

Service Options

When choosing a service, you need to consider what you actually use. If you’re someone who only uses your phone rarely, you can get plans that will allow you to pay as little as a few dollars per month. If you’re someone who’s usually in range of Wi-Fi, you may not need much data at all. If you want a plan with unlimited talk, texting, and data usage, you can get it for much cheaper than you’d pay on a major carrier like AT&T.

The options here range from pay-as-you-go plans, like the ones offered by T-Mobile, which allow you to put a certain amount of money in and only drain that balance when you actually use minutes, texts, or data. If you only make a few calls and send a few texts per month, you’d only pay a few bucks. On the other end, Walmart’s Straight Talk service is a popular option that offers unlimited talk, texting, and data at $45 per month.

Which service is right for you depends on a lot of things, including your usage and what each network’s coverage is like in your area. You’ll want to do some research of your own before choosing a service.

straight-talk-cell-phone-plan


Prepaid services also offer you even more flexibility after you choose one. If you’re not happy or a better deal comes along, you can switch — you’re not locked into your service for two years and you won’t pay an early termination fee.

Image Credit: Intel Free Press on Flickr, Jon Fingas on Flickr, John Karakatsanis on Flickr, kendalkinggroup on Flickr


    






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