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Advantage and Disadvantage of Prepaid Cell Phones

As Americans are finding ways to save, prepaid cellphones are becoming more and more popular. If you are on a postpaid plan, you pay around $100 per month and are locked in a two year contract. Prepaid cellphones offer you the same service as postpaid for a surprising price of around $45 per month without signing a long term contract.

As Americans are finding ways to save, prepaid cellphones are becoming more and more popular. If you are on a postpaid plan, you pay around $100 per month and are locked in a two year contract. Prepaid cellphones offer you the same service as postpaid for a surprising price of around $45 per month without signing a long term contract.

If you are planning to try prepaid cellphone, here are the pros and cons to help you decide:

Advantages

No Contracts 
One of the main reason prepaid cellphones are becoming more and more popular is because they don’t have contracts. Having no contract gives freedom to customers. If ever they are not satisfied with the service or for whatever reason, they can stop the service any time without paying expensive early termination fees. To sign up to a prepaid service, all customers need is to buy their phone from the provider or use their own unlocked device provided it is supported. Activate the service on the phone, pay for the monthly plan and top up every 30 days.

No Credit Check 
Another reason they are popular is because prepaid providers does not check customers credit history. They don’t do this because in prepaid customers pay in advance for the service that they will use in a month. Contract providers on the other hand check credit history and could refuse to give service if your credit is bad.

No Monthly Bill 
With prepaid, you don’t have to worry about paying expensive monthly bills. You only pay for what you need and if you are tight on budget, you can choose not to top up your account for the next month.

Cheap Unlimited Plans 
Prepaid unlimited plans are available for around $45 per month with unlimited call, text and data. You can also pay by the minute if you don’t use your phone often. Depending on your carrier, you could save hundreds to thousands of dollars by switching to prepaid in a course of two years compared to contract plans which cost around $100 per month.

Perfect for Light Cellphone Users 
Prepaid means flexibility to people who only use their cellphones rarely. You can choose a pay as you go plan and control how much you spend on your prepaid phone. Unlike postpaid where users need to pay a fixed monthly bill regardless if they use the service or not.

Disadvantages

Phones Are Expensive 
If you sign up to a prepaid service without activating your own device or BYOD you need to buy a phone from the company. The phone needs to be purchased up front in full price to use for the monthly plans. Prepaid phones are usually more expensive compared to phones offered by contract providers which are subsidized or sometimes even free.

Cost Per Minute 
Prepaid cost per minute is usually more expensive compared to contract plans. If you are a heavy cellphone user and has a pay as you go plan you will be paying more per minute. If this is the case, prepaid may not be for you or you can consider getting an unlimited prepaid plan with unlimited call, text and data.

Internet Data 
Same as per minute rate, per MB Internet data is more expensive in prepaid. You may use up all your remaining balance by just surfing the web from your mobile device. An option is getting a plan with unlimited data, but usually there is no such thing as unlimited data. Wireless providers will throttle or even cap data after you have exceeded a monthly allotted amount.

Service 
Most prepaid providers are MVNOs or Mobile Virtual Network Operators. These are companies that rents services from major providers like Sprint, AT&T, T-Mobile and Verizon. These companies then sublease the services to their subscribers for a much cheaper rate. Because of this set up prepaid providers does not have control over down time of the service or the coverage in an area. Additionally, most prepaid providers are known to have bad customer service support.

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visit this page to learn more about the advantage and disadvantage of prepaid cell phone. Guide written by Jason, he is the admin of Prepaid Cell Phone Forum.

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