Should I buy a prepaid or postpaid phone?

You have a lot of options to consider when you’re shopping for a phone, and the list keeps growing every day. Here’s one of the most elementary choices – do you want a postpaid or prepaid calling plan? Your decision depends largely on how you use your phone. While phone bills used to revolve largely around minutes of talk time, in the smartphone era it’s all about data.

Postpaid
With a postpaid plan, you pay for service at the end of a specified term of use. Every month you’ll receive a bill, which usually includes a flat monthly fee plus additional charges for added services. You’ll need to sign a contract, typically agreeing to remain with the same carrier for two years, with penalties for early withdrawal. You’ll also choose a data plan, which bases your monthly payment on the amount of data you consume every month. Unlimited data plans were briefly the norm, but recently some carriers have been moving toward tiered data plans that charge differently based on your estimated usage. By signing a two year contract, the phone is cheaper than if you buy it without a contract (this is called subsidizing) to help reduce the initial costs upfront.

Prepaid/No-contract
With prepaid service, also known as no-contract, you pay for service in advance and don’t have to sign any type of contract. In the past, these plans were usually purchased by customers who wanted a phone for emergency purposes or simply didn’t do a lot of calling, but that has all changed. Many no-contract carriers offer unlimited plans that include as much talking, messaging, and data usage you could want per month. As more smartphones (especially BlackBerry and Androids) join the prepaid ranks, no-contract phones and services are gaining popularity with buyers who like the flexibilitywithout the restrictions of a contract. No-contract carriers like Virgin MobileBoost MobileMetro PCS and Net10 have built fervent followings, and even major carriers like AT&TVerizon and T-Mobile have gotten into the game.

The differences between postpaid and no-contract plans are becoming less and less defined. As no-contract plans continue to offer unlimited services on Android devices, traditional postpaid customers can find value in these options. However for customers wanting cutting edge technology features, like 4G service, and want to pay subsidized price phone at time of purchase, postpaid is still a valid option. Ultimately the type of wireless plan you choose is only a decision you can make, but your local Best Buy Mobile Sales Consultant will be happy to help you along.

5 Comments

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  1. Prepaid phones are by far the better choice, for me at least. I like being in control of my finances and with my Tracfone I know exactly how much I am spending.

  2. I hear what you’re saying. Unknown costs are killer on the budget!

  3. Oh for sure. the smartest way to go is prepaid. i was stuck on a contract phone and just kept getting these random fees. When I would call them to discuss only ONCE did they take off the fee. It was just not worth it anymore and I paid for a cancellation fee( yeah another fee) and I got a prepaid. Like Johnny I have a tracfone so I cant speak to other prepaid phones. I know when I was doing my shopping I looked and prices first and then the types of phone. Tracfone for me was best in both categories. I got the LG400g and I pay MAX 30 dollars a month.

  4. I was with a contract plan for years, and had no problems, other than cost. Prepaid is definitely less expensive for one user, but I’ve noticed the “family plans” seem to run cheaper with the contract companies. I’ve seen no group or multi-phone discounts with the no-contract carriers, so I’d say, what you need depends largely on HOW MANY you need.

  5. @HannaH

    I would check out ting.com they are the only pre-paid I have seen that offers family plans. Awesome rates too. I currently use StraightTalk and have been very happy with that service as well.

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