A cell phone is a wireless electronic device that is used to make phone calls, exchange SMS & MMS messages, access Internet and do a lot more . Depending on how a cell phone is used, certain phone plans offer greater cost savings than other plans. Two of the most common types are Prepaid Phone Plans and Contractual (“Postpaid”) Phone Plans

Prepaid Phone Providers

Prepaid cell phone plans do not require a long-term contract. Instead, users prepay for preset amount of minutes of access per month, or enroll in a pay as you go plan. Prepaid minutes are available for use until they are used or until they expire, at which time more minutes can then be purchased and added

Prepaid phones are smart choice for those who rarely use their cellular device. Because these phones are not tied to a fixed monthly rate, users can spend as much or as little as their budget allows on their cell phone plan. These phones also let parents more effectively control their children’s monthly cell phone bill by setting usage constraints. Because prepaid phones generally do not require a credit check, prepaid plans may also be ideal for those with either poor credit or a no credit. Anyone can go to a local convenience store, buy a prepaid SIM card for a relatively cheap price, and your unlocked cell is ready to make calls in minutes with no contract. The prepaid phone plans offer same features as the expensive contracted plans such as voice calls, SMS, MMS , Internet and roaming services at a much cheaper rate.

Most cellular phone companies in the US including Verizon, AT&T, Sprint, T-Mobile and US Cellular offer prepaid cell phone plans.  Prepaid cell phone plans allow a user to pay as they go, meaning that a user is only paying for the minutes that they use. On the other hand, Postpaid cell phone plans typically involve a long-term contract (generally 2-years in the US), a credit check, and subsidized phones from major carriers to offset long-term commitment. However, things have shifted lately when T-Mobile and AT&T promoted prepaid and no contract plans with BYOP (Bring Your Own Phone) option. We may be seeing end of subsidized phone era, and entering into Prepaid and No contract phone era.

Before you make a decision to choose a Prepaid vs. Postpaid (Contracted) plan, you’ll have to know your cell phone usage patterns. Phone plans generally offer X minutes of voice calls, Y number of texts, and Z GB of data usage. Depending on how much voice calls you make, how many texts you send and receive, and amount of data you use on your cell phone determines the desired phone plan you require. There is no reason to purchase unlimited calling, unlimited text and unlimited data if you don’t use them. Instead, pick a plan that best matches your usage patterns.

Traditionally, prepaid phone plans are mostly used by international travelers, young students and people with low income families. However, with proliferation of no-contract and prepaid phone plans with significant cost savings over postpaid plans; and expanding phone selection options; the Prepaid Phone Plans are no longer for only low income families.  Some of the benefits offered by prepaid phone plans are:

No Contract- prepaid phone plans offer monthly fixed rate at preset amount of minutes/text/data, or pay as you go minutes/text/data an expiration date ranging from 30 days to a year.  If you do not like the services received, you may cancel and move on to a new carrier at any time.

No Credit Check: A prepaid phone plans do not require credit check. For those with less than optimum credit history, prepaid plan works quiet well.

Activation fees: Prepaid phone plans have no or lower activation fees than Postpaid plans.

Value for money: A prepaid phone plans generally offer significant cost-savings over postpaid phone plans.

Wider Choice: There are numerous prepaid cell phone providers all competing for a share in the prepaid cell phone market thereby offering wider choices for customers. All prepaid phone plans are branched out from the major cell phone providers: Verizon, AT&T, Sprint and T-Mobile. You pick the plan with desired voice minutes, number of text messages and amount of data you use.

Prepaid cell phones make cell phones available to everyone not only for children and traveller. No contracts are required and no bills are ever due, because each prepaid cell phone user pays for his or her minutes in advance. Prepaid cell phones make great cell phones for seniors and children to have in case of emergency, and users do not have to worry about going over their allotted minutes. For young people with no credit history and for people with bad credit, contract cell phones may not be available or, if they are, may require a large financial deposit; prepaid cell phones make cell phones available to these individuals.

At the end of the day, the point isn’t just to save more money (even though that’s often a big factor). It’s about not being tied to a particular carrier or phone for two years just because one has signed a contract. With prepaid, contract-free plans, you can focus on what should matter most: the quality of coverage and service a carrier provides.