Are You Ready to Ditch Your Cell Phone Contract?
November 07, 2013I was happy to hear that my colleague and fellow finance geek Linda Robertson recently joined me and Greg in ditching cell phone contracts and coming over to the prepaid side. I’ve been a huge fan of prepaid cell phone plans over the last few years and they keep getting better in terms of price, phone selection, and overall value. For example, you can now get a top of the line iPhone or Android smartphone and pay a fraction of the monthly cost of the big 4 carriers (Verizon, AT&T, Sprint, and –Mobile).
The biggest downside is that you have to pay more for the phone upfront. However, you can always keep your current phone if you’re happy with it or you can get a really good deal by buying a brand new but older model phone. (The “improvements” in the latest phones over recent but older models are pretty marginal when you really think about it.) It’s kind of like being able to buy an older model car that’s never been used. You get the much lower price without worrying about maintenance issues. Even if you do get the latest phone, you’ll almost always find that you still save money in the long run because of the much lower fee you pay each month.
In my case, I just decided to switch from my trusty but now very outdated (routine app updates were constantly causing the memory to become full) LG Optimus V on Virgin Mobile to a Samsung Galaxy Nexus on Ting. Since the phone came out two years ago, I was able to get a really good deal on it but the specs are more than sufficient for my needs. As a Nexus phone, I also know that I’ll continue getting Android updates from Google, which may not be the case with other older Android phones. Finally, it’s one of the few phones that I can get a radiation-blocking case for. We don’t know definitely if cell phone radiation causes cancer but better to be safe, than sorry (plus the case is supposed to enhance the phone’s signal and battery life too).
So why Ting? Based on my typical cell phone usage, I would only pay about $30 a month and the customer service is fantastic (calls go right to friendly operators in the US). It uses Sprint’s network like Boost and Virgin Mobile but unlike other prepaid carriers, it also includes voice roaming on Verizon and free mobile wifi hotspot service.
Yes, Sprint’s network is not as large and fast as Verizon’s and AT&T’s but I’ve traveled all over the country using Virgin Mobile and rarely have had any problems with coverage and have found the data speeds to be acceptable. Why pay more for coverage that I rarely use? (Keep in mind that this is coming from someone who travels a lot for work so the average person would likely need that extended network even less.)
But to hedge (can’t you tell I work in the financial world?) against the possibility of being in an area without service, I’m also considering getting prepaid service for another older phone I have from H20 Wireless, which works on AT&T’s network and costs about $10 every 90 days for up to 200 min and/or 100 MB of data. It’s not a lot but it’s really just there as an emergency backup (also works if my battery dies or I break or lose my phone somewhere).
Is this the best plan for everyone? Of course not. You may live in an area with poor Sprint coverage (in which case, check out H2O Wireless or PagePlus, which uses Verizon). You may want the iPhone (which you can get on Virgin Mobile). You may want something even cheaper (Freedompop now offers limited but FREE cell phone service). You may want unlimited minutes and data (see StraightTalk). Each of those carriers has their own drawbacks too. The point is to be aware of your options and think outside the contract to find the plan that works best for you.