The phrase “prepaid cell phone” conjures up images of cheap outdated phones with terrible call reception. However, that is changing as prepaid carriers add low-cost, flexible calling plans and the latest smartphone models to their offering. Here are five prepaid phone myths debunked.
Myth 1: Prepaid cell phone plans cost more than contract-based cell phone plans.
It’s a common misconception that pay as you go cell phone plans cost more than postpaid plans. According to the New York Times, prepaid phone plans can “save hundreds of dollars over the course of two years compared to a contract plan.”
The Times estimates that if you buy an iPhone on a prepaid plan with Virgin Mobile, you will pay approximately $1370 over two years (including the cost of the phone.) On the other hand, an iPhone on a 2-year contract with AT&T would typically cost at least $2,360.
So what’s the catch? Why aren’t consumers lining up to buy prepaid phones? Sticker shock! Most prepaid plans do not subsidize the price of a cell phone, requiring you to pay full price. In these tough times, it is not easy to shell out over $500 upfront for a smartphone. (Although not all no-contract phones cost huge dollars. Best Buy carries a number of Android smartphones for under $99.)
But it’s true, prepaid mobile phones do save you money in the long-run. You control your spending because you only pay for what you use. There’s no long-term contract to sign, no activation fee, hidden charges or termination fee.
Most prepaid carriers also offer flat-rate monthly plans that are low-cost and affordable. Virgin Mobile, for instance, charges only $35 a month for unlimited data, messaging, and 300 anytime minutes. If you need more, their $45 a month plan provides the same unlimited options with 1200 minutes. The great thing is you can change month to month to see what works best for your talk needs.
Myth 2: Prepaid plans offer limited data options.
Data options are readily available with prepaid carriers. Cricket, Virgin Mobile, and Boost Mobile offer unlimited monthly plans for a flat-rate as low as $50, which include unlimited talk, text, and data. The unlimited data pricing is applicable only for feature phones. Smartphone users need to pay an add-on price for data.
Myth 3: Prepaid carriers offer outdated cell phone models.
Not true! Going prepaid does not mean that you have to settle for an antiquated model with outdated features. Prepaid carriers have added both Android and iOS smartphones to the mix. The iPhone S is now available with no contract on Virgin Mobile, while Boost Mobile offers the HTC EVO Design 4G.
Myth 4: Prepaid cellular coverage is poor and unreliable.
In reality, prepaid services rely on the networks of major wireless providers to carry their signal, offering the same coverage and data speeds. For example, Jitterbug uses the Verizon Wireless network, Boost Mobile uses the Sprint network, and TracFone Wireless uses a combination of AT&T, T-Mobile, and Verizon Wireless networks.
Myth 5: Prepaid phones are good only for people who rarely make calls.
Prepaid phones are no longer just meant for people with bad credit or teenagers. Prepaid carriers have introduced a variety of models, plans, and pricing that make them a great option for anyone who wants flexibility with their cell phone usage and would like to save money on their phone bill.