How Prepaid Mobile Options Could Save You Money

October 4, 2013 at 8:59 AM 1 comment

Are you in love with your smartphone? A recent survey from Online Psychology Degree found that 90% of people ages 18-29 sleep with their smartphone, and that 1 in 3 would rather give up sex than their phone! No matter how you may feel about your phone, it can cost you a bundle. Media packages can be quite steep, with many users not even coming close to their monthly limits. Extra fees can rack up, particularly if you are traveling abroad or calling friends overseas.

As a result, more consumers are turning to contract-free options. Although you pay for your smartphone out of pocket, you can then use only pay for what you need or similar prepaid service providers and only pay for what you need. Whether or not this is a more cost-effective option will depend on your circumstances. It’s worth looking at more closely if you’re trying to lower your phone bills but don’t want to sacrifice on your phone use.

How Prepaid Works

The prepaid market started out as a simple way for consumers to gain access to cheap phones or wireless service, particularly if they were unable to qualify for a regular contract. However, today the market has grown to include a number of options that appeal to a wider audience. In a typical phone contract, you receive a free or deeply discounted smartphone in exchange for agreeing to a monthly bill for approximately two years. The problem is that many consumers find that their monthly bills are often far higher than they bargained for, with add-on fees, overage charges, or roaming charges.

By contrast, when you choose a prepaid phone or SIM card you don’t sign any contract, instead paying the full cost for the smartphone of your choice. You can either use a free SIM card and top it up with minutes as needed, or pay a small flat fee each month to a service provider that you can add money to as needed. The major benefit of this setup is that you don’t have any surprises on your phone bill, and can feel more in control of your finances. You can still access mobile internet services with these prepaid options, in addition to low rates on international calls and other perks.

Potential Drawbacks

Although going prepaid can certainly save you money, there may be potential downsides to this arrangement for some consumers. The selection of smartphones available in a prepaid market is smaller, or you may not be able to afford the latest model without the subsidy that comes with a two-year contract. A pay as you go SIM card can be used in any phone, however. If you are on the phone constantly for business purposes, the full monthly cost of an unlimited plan may be more financially feasible than going prepaid.

The Bottom Line

In the end, whether or not a prepaid option will save you money depends on how you use your phone. If you are regularly hit with overage charges or international fees, it makes sense to start looking at alternative options. While the market was somewhat limited even a few years ago, today’s prepaid market offers a number of different packages to suit every budget.

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1 Comment Add your own

  • 1. Tahnya Kristina  |  October 4, 2013 at 10:32 PM

    Wow, that statistic is kind of scary. Its crazy how many people are attached to their phones. Technology is def. miles away than from what it was just 10 years ago.

    Reply

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