Prepaid cellphone plans are gaining momentum with some major carriers like Sprint expected to release a package with the iPhone by the end of the month. Still, should you be exploring prepaid cellphone plans?
It sounds cheaper but is it really?
It depends on the cellphone user. The prepaid cellphone plans vary in how the pricing works. Some plans offer unlimited voice, text, and data usage which are more pricey ($50-$60/per month) than those with set limits ($30-$40/per month). For low volume users, some plans offer a daily rate for using your phone such as T Mobile’s $3 per day program which translates to $90 per month if used throughout the month. Any plan with limits on usage should be reviewed carefully as the overages can be significant, defeating the purpose of the coverage in the first place. If you are interested in a prepaid plan but are currently under contract with your service provider, you also need to factor in at least a $250 early termination fee.
Don’t overlook coverage issues with some providers
Most of the major carriers offer a prepaid option which should provide similar coverage to what you experience with your current plan. However, certain providers may be small and leverage off of other networks which could limit service in certain areas. If being connected is very important to you, then this is probably not a great option unless the plan is through a major carrier’s network.
The price of the actual phone matters
If you plan on signing up for Sprint’s prepaid plan option with the 16GB iPhone 4S, be prepared to shell out at least $400 versus $200 for those under contract. This high cost could be a deal breaker for those that are addicted to relatively new phones.
How can I compare cellphone providers?
You might want to check www.billshrink.com, where you can get an idea of the cost of cellphone plans and compare to your current plan.
You can also go directly to the source and visit the cellphone service provider’s website (i.e. Verizon, T-Mobile, AT&T, Sprint). However, navigating through each website and comparing plans can be somewhat cumbersome which is why Bill Shrink might be a better alternative. Even Verizon, which offers the best site navigation provides so many options to choose from that it makes it difficult to compare to other providers.
More personal finance questions? Ask a personal finance expert online.
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