Mobile phones nowadays are used more in the capacity of a mini laptop than merely for phone or messaging purposes. Many people conduct professional and personal business with the loads of apps available, social networking, email capabilities, and on.
The device is favored and more powerful than it’s ever been, with a majority of the population in this country having a smartphone. The price point, however, continues to increase as the technology evolves, almost equivalent to purchasing a small computer or tablet.
On average, an individual will spend roughly $1500+ on a plan, but there are ways to reduce these costs without diminishing the quality of service.
One strategy is to avoid the major carriers’ requirement of fixed-term contracts and instead switch to prepaid phone plans, essentially a billig mobil uten abonnement or cheap mobile without a subscription or contract.
While each option has pros and cons, it’s worth weighing the differences to see which offers the most savings and could be a better fit.
A contract commits you to a set term with specific conditions and a determined payment for that timeframe, with a considerable fee if you try to cancel. None of that applies to a prepaid plan. Instead, you pay upfront for the services you’ll use. Once these run out, you’ll refresh with your next month’s payment. Let’s look at each to see how they differ.
What Is The Primary Difference Between Prepaid Cell Phone Plans And Contracts
Cell phones are more than the clunky flip phones used for urgent calls that they once were in the past. Almost everyone has one, and most people use it for professional and personal business purposes.
People have become so dependent on these devices that they often check them first when waking and the last thing they view before lying down at night. Most indulge so much that interaction between people in real-time has diminished considerably.
When shopping for your first phone, or if you haven’t done so in quite a while, it can be daunting to decide on your plan.
Some people prefer to avoid the confines of a contract, considering the years of commitment, the costs that the primary carriers charge, and the cancellation fees if they decide to switch to a new carrier.
You also have the option of “postpaid” or “prepaid” plans besides the “no-contract” option. What are the differences, and how do you know which fits your lifestyle and personal and professional needs? Let’s look at each to learn the pros and cons.
Prepaid Phones
With a prepaid phone plan, the phone usage charges are paid upfront. You decide how much you might use in texts, minutes, and gigabytes of monthly data. When and if you run out, these will be renewed the following month unless you pay additional money to refresh the plan.
A contract plan is more stringent with the major carriers. These generally run for two years with varied plans for different levels of data, text, and talk. Your phone’s cost is typically encompassed in the monthly installment, although many contract carriers will market new phones at no cost.
What Are The Benefits Of Prepaid Plans
It might seem like the differences between prepaid and contract plans are minimal, but, in fact, the prepaid option offers many benefits that allow for money savings. If you have a strict budget and hope to cut costs, prepaid carriers will likely be the better option. Check out these benefits.
Lower Pricing
The primary benefit of prepaid phone plans compared to contracts is the lower monthly cost. Instead of committing to a two-year plan, you can buy only the services you want and need.
There are SMS-only options for those who text primarily. If you use your mobile consistently for professional and personal business purposes, you can also find unlimited data and calling. As a rule, if you don’t need unlimited data, you can usually find a prepaid option for a lower cost.
There can be exceptions, but typically, the prepaid plan is almost always less expensive than the contract “equivalent.” There’s also no activation fee, which can create an expense with the first month’s installment.
Flexibility
A contract plan usually commits a plan holder to two years with termination fees incurred if the client attempts to cancel the plan to switch carriers or, in some cases, they need to buy out the contract. The cost is simply too high for most people to abandon their commitment before the contract expires.
A prepaid plan allows greater flexibility with the opportunity to change plans whenever you want to check out a new carrier. This freedom alone makes this option a valuable service compared to the restrictions of a contract plan.
A good reason to get involved with a contract is if you have no doubts that this is the carrier you want, the cost suits your budget, and you know you’ll be able to continue with these payments for the entire contract term.
You’ll also be okay with price increases and any changes to your account that come along throughout the contract period because that’s likely.
A Credit Check Is Not Required
With a contract cell phone plan, credit checks are required to get approval from the mobile carrier to ensure you’ll be able to pay the bill promptly and consistently. The carrier wants to see a good score to take the risk.
If you’re working on improving your credit profile, you might find it difficult to obtain a contract with major carriers. Prepaid cell phone plans aren’t concerned with credit checks because these carriers expect payment upfront for their services. This eliminates any risk associated with paying bills.
An Abundance Of Features
At one point, prepaid cell phone carriers offered minimal features with their plans, particularly regarding calling and data. This created the idea that the services were inferior to the contracts offered by major carriers. This trend has drastically changed over the years.
With cellular network improvements and mobile phone provider competition, prepaid and contract carriers are comparable in their plans. Many providers offer unlimited data, text, and talk rates, with data speed and network coverage improving greatly over the years.
Many of the prepaid providers are “piggybacking” off the three major networks, enabling nationwide access. This has allowed streaming and data speeds for internet use. Prepaid options likely won’t be top-tier like a contract plan, but the similarities and the savings make them worthwhile.
Overage Fees Are Not An Issue
With a contract plan, the simplest way to waste money is to exceed your contract limits. When paying at the end of each month, overage fees can be excessive, with some inadvertently seeing rates in the hundreds.
These mistakes happen more easily than most would anticipate. If you turn off WIFI without noticing, the data will drain rapidly. Many engage with their phones, not realizing they are racking up incredible charges.
With prepaid phone plans, overage fees are not an issue since the service stops once the limits are reached until the next payment is made or you purchase additional usage. Prepaid phone plans are the best protection against the potential for expensive overages with contract plans.
Prepaid phone plans are a good option, particularly for teenagers who are allowed to have cell phones at home. With contract plans, kids habitually create major overage charges by accessing features that involve extra fees.
In doing this with a prepaid plan, the monthly charge will be the same, but the services will be used up more rapidly, causing the owner to add to the monthly usage or wait for the following month to refresh.
Final Thought
Buying a phone with no subscription or contract allows users greater flexibility and convenience than the restrictions and expenses associated with a contract plan. Typically, contracts are set for two years with stringent guidelines, the potential for overages, and great difficulty if attempting to cancel the plan.
If you want to switch to a new carrier or find something more affordable, you will either need to pay a termination fee to cancel or buy the remainder of the contract out.
In what has become a more competitive market, prepaid phone plans are now a viable option that saves consumers money while answering their personal and professional needs.
