How to (possibly) cut your Cellphone Bill in Half

by Justin Weinger on October 8, 2013

Have you seen those TV commercials, either at home or at the movies, talking about how you have a “choice” when it comes to cell phones and that their “prepaid phones” will give you the exact same service as the contract phones that you already have but without the contract and for half the price?

Of course you have.

In most cases if you have a contract with one of the top 4 cellular carriers, as well as a data plan and one of the newest smartphones, you’re probably paying over $100 a month for your services and, in many cases, closer to $150. With those numbers in mind, if you do the math you see that you actually can save $900 a year if you can cut your $150 month phone bill and half. (Even if you’re only paying $100 a month you’ll still save $600 a year by doing the same.)

The question of course is simply this; is a prepaid cell phone really as good as a contracted cell phone? The answer? Maybe.

While we realize that “maybe” is rather vague the fact is that generalizing about whether a prepaid plan is better isn’t exactly easy. One fact is certain however, and that’s the fact that, no matter what phone or what plan you are using, the actual networks and towers being used to carry your conversations, your text and any other content that you might be sending out are owned and operated by the Big 4 carriers, Verizon, AT&T, Sprint and T-Mobile.

Also, those prepaid carriers are also owned by one of the Big four carriers. For example, Boost and Virgin Mobile are owned by Sprint and, as far as Jane Wallace (Virgin Mobile bigwig) is concerned, the difference in quality between prepaid companies Boost and Virgin Mobile and contract company Sprint is virtually nil. There is a difference in service however, and that’s the fact that with Sprint you have “roaming” and with the other two you do not.

That’s a big difference, maybe. (There’s that word again.) Here’s why. If you live in an area of the country where there’s a strong Sprint signal, that Boost or Virgin Mobile phone is going to be indistinguishable from a Sprint phone and the service is going to be equal. On the other hand, if you live in an area where the Sprint signal is weak and Sprint is relying on one of their mutual assistance contracts to kick in and provide you service, your Boost or Virgin Mobile phones are basically going to be worthless pieces of plastic.

So, if you live in an area of the country where there is an excellent Sprint signal it would definitely be worth going with Boost or Virgin Mobile because their unlimited everything plan is $55 a month whereas Sprint’s plan is $80 a month, a difference of $300 a year.

There is another difference however, and it’s a big one. Since, with most long term contracts, you can pay for a new phone with a monthly installment plan, it’s much easier to get, say, that new iPhone 5C because you’re not going to have to plunk down $600+ for it at one shot. With a prepaid phone however you don’t have that luxury.

For example, a Samsung Galaxy S4 from Verizon (with a 2-year contract) will set you back about $150, but the same phone with prepaid carrier Metro PCS is going to do some serious damage to your wallet at $549. The simple fact is that, with a postpaid carrier, you are paying more in monthly service fees so that they can recoup the cost of their phone. If you have the cash on hand, and you plan on keeping your new phone for at least two years, prepaid is probably the right way to go. On the other hand, if you’re not walking around with an extra $600 spending cash and you’d like to be able to get a new phone after the first year, a postpaid plan might be better for you.

Most Americans will be surprised to find out that the rest of the planet as actually been using prepaid phones all along. That’s right, the postpaid market in the United States is actually the odd man out when it comes to global telephony.

It seems, for whatever reason, that we love our cell phone subsidies but, if you don’t, there are certainly plenty of prepaid options available on the market today. With Boost and Virgin Mobile now allowing you to bring your cell phone number over from your contract phone, if you’re keen on cutting your cell phone bill and half, now is as good a time as any to do it.

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