What are Prepaid Phones?
When it comes to choosing a new cellular phone, many people are accustomed to seeing a price, along with a monthly fee. That’s the contract approach to phones, with what amounts to a down payment, with monthly payments built into a two-year contract.
With a pre-paid phone, the price you see is the cost to buy the device outright. You own it. From there, you choose a pay-as-you-go plan, or pre-pay for services like voice calls, voicemail, text and even data.
Why do People Choose Prepaid Phones?
The primary reason people choose prepaid phones is flexibility. You aren’t locked into a contract with a prepaid phone. That means you can change the services you have access to (even the cellular provider) on a monthly basis. You may decide you only want text and voice capability for a month, so you don’t pay for data.
Prepaid phones also tend to be less expensive than the smartphones offered on contract. You typically save in the upfront cost, and you have the ability to choose minimal services to make your total monthly cost much less as well. If you hit a financial crunch, you can decide to forgo cellular service altogether for a month or two, but you still own the prepaid phone.
Prepaid phones can be a good solution for people who want to be able to stay in touch, but either don’t have the need to be constantly connected, or don’t want to commit to a long-term contract.
How to Choose the Right Pay-As-You-Go Plan
The biggest decision to make after choosing a prepaid phone is whether to opt for a pay-as-you-go plan, or a monthly plan.
With the first option, you top up funds in your account as you use it. Instead of specified allotments of services, you pay for use based on posted rates. So rather than having a set number of “free” text messages, you pay for each text, and pay by the minute for phone calls. This tends to be a popular with people who don’t use their phone much, and treat it more as an emergency contact device.
With a monthly plan, you’re still not on a contract, so you can change the plan or switch providers at will. But you pay a base monthly fee with defined allocation of services like voice calls, long distance, text messages and data.