Prepaid Vs. Contract Phone Plans

Many citizens are facing financial pressures and considering changes to their budget in the coming year. If you have a contract phone plan right now, you may be considering a prepaid plan at the end of your contract. While prepaid plans have limits, these limits can be managed and you can save money with a prepaid phone plan.


Benefits of a Prepaid Phone Plan


A prepaid phone plan is an ideal choice for a first phone. If you’re headed off to college and will have access to plenty of data on campus, then the savings you’ll enjoy with your prepaid phone plan can be enjoyed with a few downsides.


If you’re thinking of switching to a prepaid phone to lower your expenses, consider the following:

  • Make sure your contract is up; buying out of it will be costly
  • Be aware that you may have to buy your new phone outright to get on a prepaid plan
  • Do your best to keep your data use low


Once you use your data for the month, you’ll have to buy more or live within the limits left to you. There are plans that allow you to purchase unlimited data, but they will cost more than those plans that limit your data.


Be very careful if your future plans include international travel. Contract phones generally travel more easily than prepaid phones. Make sure you get your phone issues addressed before you travel.


Benefits of a Contract Plan


You’ll have less of a struggle with data limits, or throttling if you have a contract phone plan. If you use your phone as a hotspot when working on your side hustle, this throttling action can lower your ability to earn.


If money is tight and you need a new phone, remember that most contract plans will allow you to pay for your phone over time. The data will be more costly and you’ll be bound to the provider. However, you won’t have to purchase your phone separately from your plan as you may when signing up for a prepaid phone.


How Prepaid Phones Can Teach Responsibility


A young person who gets their own prepaid phone when they move out will get some real-life experience in living within limitations. A family contract plan with unlimited data may have been the norm; once they get to their own apartment or dorm, dealing with just 5G of data for the month may be frustrating. However, once the bill comes, they may be happier with their choice.


Requiring a young person to pay for their own phone can also teach them to shop around. They may choose to join up with a group of friends or fellow students to create a group that can buy into a contract.


A simple phone on a prepaid plan can save the user a decent amount of cash. Depending on their data needs and the age of their current phone, a prepaid plan might be enough. Those who need unlimited data without throttling limitations may not be satisfied with a prepaid phone plan.