PrePaid Cell Phones

PrePaid Cell Phones: The Facts

Prepaid cell phones

What are the advantages of prepaid cell phones? The most obvious advantage is not being stuck to a contract for an allotted amount of time. In fact, many traditional phone carriers lure people in by “discounting” phones in trade for signing up for their plan. But those savings are often more than offset by the amount you’ll end up paying in service fees. For example, let’s say you have a phone you can buy for $300, or get for $100 if signing a 2-year contract for say, $70/month.

Prepaid Cell Phone Plan
Phone: $300
Plan: $40/month
2-year total: $1,260

Traditional Cell Phone Plan
Phone: $100
Plan: $70/month
2-year total: $1,780

In this example, that “$200 savings” on the cell phone actually amounted to an overpayment of $520.

But it doesn’t end there. Unlike the cell phone provider who’s got you locked in for 24 months, the month-to-month provider knows you can up and leave on a moment’s notice if you’re not happy with the plan. What’s more is that the cell phone provider that’s got you locked in realizes that no matter how unhappy you are with the service, there’s a good chance they’ll re-hook you at the end of that 24 month period with a “discount” on the next latest and greatest shiny new phone and an amazing “no activation fee” deal that saves you an amazing $50 that was probably a no-cost activity for the cell phone provider to begin with.

So, whether or not a prepaid cell phone is right for you is something you’ll have to decide for yourself.