Android or iOS? iPhone or Samsung? AT&T, Sprint or Verizon? Prepaid or cell phone contract? If you need a mobile phone, these are just some of the questions that you have to answer. In today’s constantly interconnected world, you almost cannot survive without a mobile phone.
Aside from using it as a communication tool, mobile phones have become an all-in-one gadget which people use to check their e-mail messages, listen to music, play games, watch videos, browse the Internet and more.
In the following sections, we will take a look at which type of mobile phone subscription you can save on: prepaid or contract. We will also be dishing out additional tips on how you can save money when looking for mobile phones.
In this guide...
Option 1: Pay-as-You-Go Mobile
Also called pay-as-you-go, pay and go, prepay, pay-as-you-talk or prepaid wireless, a prepaid mobile phone requires advance purchase of services used. For mobile phones, the advanced credit will be used up only when accessed or consumed.
Let’s say that you purchased a $49.99 prepaid plan from a mobile carrier offering pay-as-you-go service. For this amount, you can consume 400 minutes of talk time. There are also mobile phone carriers for prepaid which include data service and text messaging service on their plans. Another variation of this is a day-by-day offer, where you will have unlimited access for just $3 per day.
The way that pay-as-you-go mobile service works depends on the carrier. However, the general idea is that you will be paying a fixed amount for a specific number of calling minutes which may or may not include data and MMS services.
Without committing to a contract, you can use the phone whenever you want, although you need to make sure that you have sufficient credit for it. Once you have used up all the credit, you would need to top up the prepaid plan again.
If you have a pay-as-you-go mobile plan, using up all the credit will force the network to deny the call that’s being made. But as mentioned earlier, you can top up your credit anytime using several payment mechanisms:
- Via credit card or debit card.
- Via electronic reloading.
- Using direct debit from your bank account (via ATM cards).
- Using swipe cards on retail stores where the balance on the card is credited automatically.
- By buying top-up or refill cards at certain stores. The cards have unique codes which should be entered into the phone to add credits to the balance.
Interestingly enough, prepaid mobile service came in late in the industry. Prior to its introduction in the 1990s, only post-paid services were available for cellular phone subscribers.
Option 2: Contract Mobile Phones
If you think that you’re making too many calls on a monthly basis so a prepaid mobile would be inconvenient, go for contract mobile phones. As the name implies, you will be purchasing a mobile handset under contract with a mobile phone carrier. As a subscriber, you will be paying a single monthly fee to the carrier for a fixed period of time.
Depending on the carrier where you will get the plan from, you can sign for an 18-month or a 24-month contract. What’s included depends on the plan that you are signing up for, but rest assured that there are several plans to suit the calling and data needs of different subscribers.
What’s good about going for a contract mobile phone is that you do not have to worry about topping up your phone credits. Let’s say that you have an urgent call at the office to make but you have a prepaid mobile. You ran out of credit, so you need to look for a store which offers electronic reloading.
With a contract mobile phone, you don’t have to worry about running out of credit because the minutes are already included with your monthly contract. Should you exceed the allowable number of minutes, you can still make the call through your mobile phone carrier – although charges do apply.
Another benefit of going for a contract mobile phone is that you can get the latest handsets for free. If you want to upgrade from iPhone 5c to iPhone 5S, for example, you can do so through your mobile phone carrier. To make switching networks tempting for subscribers, mobile phone carrier companies typically offer additional perks on their subscription plans.
Depending on the plan that you will get and the handset that you want, there is a specific number of minutes, texts, data and monthly fee associated with contract mobile phones. Also, you would have to choose how long you want to be under contract with a certain carrier.
Which Plan Saves You More? Prepaid or Contract?
Now that you already have a basic idea about how contract and prepaid mobile phones work, how would you know which plan saves you more money? Here are a few things to consider:
Pay-as-You Go Mobile
First, when is it a good idea to go for prepaid mobile? If you frequently call friends or family for hours on end, this may not necessarily be a good idea for you. Not only would you have to worry about topping up your credits every time you make a call, but it might also end up being more expensive in the long run.
Prepaid mobile is a great idea for those who do not make calls that often. Let’s say that you simply want to have people from work or the occasional family members to have a way to get in touch with you, a prepaid mobile phone is your best option.
Based on the mobile carrier that you will go with, you can purchase a $50 credit all in one go or choose a day-to-day plan. It’s all a matter of deciding which one ends up being cheaper.
Another benefit of pay-as-you-go mobile is that they are flexible and adaptable. You can pay for a prepaid wireless plan that’s charged on a monthly basis. Cancel anytime and you would not have to pay for termination fees.
The biggest disadvantage, however, is that you will not be subsidized with a new handset. Unlike monthly mobile phone carriers where the handset is already included with the contract price, you would have to look for a brand new phone yourself. In the US, some of the best prepaid mobile carriers are Boost Mobile, Cricket and Virgin Mobile.
Monthly/Yearly Mobile Phone Contracts
Now, if you do make a lot of calls per month and you subscribe to mobile data plans, you use your phone to download music, check your e-mail, etc., you may want to sign up for a monthly or yearly mobile phone contract. Getting a free handset is the number one reason why most subscribers go for this type of a mobile phone subscription.
If you want to always have the latest versions of your favorite smartphone brands, then a mobile phone contract ends up being cheaper for you.
As compared to pay-as-you go deals, you might end up having cheaper bills with monthly or yearly mobile phone contracts. However, it still depends on your calling habits and data usage. Most carriers offer free line rental deals as well as free gifts and plenty of extras.
If you are looking for a mobile phone contract, you are the winner in the end as a subscriber because the competition between carriers is stiff enough for them to offer great deals.
More Ways to Save Money on Mobile Phones
Finally, what are the additional ways for you to save money when looking for mobile phones?
Know what your calling habits are
Before making a decision between prepaid and contract, it is best to determine what your calling habits and data usage are. If you talk for an average of 300 minutes per month, would it be cheaper to go for prepaid or contract?
If you’re a heavy data user, you may want to look for mobile phone contracts with unlimited data – something that’s usually available on contract mobile phone deals.
Get last year’s model
With phone manufacturers releasing a new model of their phones every so often, the latest model that you have right now may be out-dated after a couple of years. As such, you can get lower prices on last year’s model instead of going for the latest, more expensive handset.
Ask your friends what they use
The rates and plans offered by different carriers vary from state to state, so choosing between carriers and plans is a matter of personal preference. If you cannot decide between prepaid and contract, ask the opinion of friends and colleagues at work. They should be able to give you an idea about which companies work and which ones offer better deals.
Compare different offers
Lastly, make an informed decision by comparing the different plans available online. There are websites which publish charts that show how many Gigabytes of data, calling minutes and text messages are included with different plans. When you make a side-by-side comparison of these details, you can decide which mobile phone plan will give you the best value for your money.