Photo Credit: Austin Krause
When you subscribe to a cellular service contract, you’ve probably paid to much. Granted upfront you might save a few bucks by getting a free phone however in the long-run –you won’t come out ahead. At&t is the worst offender when it comes to overcharging on contract customers vs. prepaid plans. When comparing the two, did you know you’re paying about double? Most cases this represents about a two thousand dollars bogey. Not far behind At&t, Verizon holds onto its position as the most expensive wireless carrier in the United States. Although the prepaid plans are also expensive, you will still end up saving money on a prepaid plan vs. a contract. T-Mobile has always been considered the “budget” wireless company. Going prepaid can still save you a nice chunk of change over a two year contract. 100 MB Data cap You might have noticed there isn’t a chart anywhere for Sprint. That’s because Sprint Nextel doesn’t offer a prepaid service. That said, Sprint acquired the prepaid carrier Virgin Mobile so technically you can get prepaid from them. Here’s a cost comparison between the four big no contract wireless carriers in the U.S. Notice all four are inexpensive compared to AT&T, Verizon and TMobile. All offer unlimited data, text and talk.
Other reasons you should avoid Wireless carriers and contracts
Should you always buy your phone outright? I think so. Here are three more reasons to completely avoid carriers, though not all of them are related. Virgin Mobile Reason #1: Phone Prices & Activation Fees Even when you think you’re getting a good deal on a phone, thanks to that two year contract you’re signing, buying directly from the carrier still results in being ripped off. Despite the fact you’re already paying more than you should on a monthly basis, the wireless company isn’t giving you the best deal on your phone. Reason #2: Terrible Customer Support What kind of technical support do you get when you pay the full premium contract price every month? The kind that speaks incomprehensible English. The reps only understand how to verbalize words on their screen and operate on an extremely slow computer. When you’re on the two year contract, the wireless companies know you’re locked in. At this point customer service doesn’t matter. The wireless carrier is thrilled at the prospect of your phone not working. It means less people using its towers — without any loss of revenue. Yeah I know… I’m making some broad assumptions here but you tell me if I’m wrong. Reason #3: Prepaid plans avoid all of the hassle With a prepaid plan, you own your phone. You can cancel whenever you want without incurring an early termination fee (ETF) or a technology cancellation fee (incurred when an expensive phone is discounted for a contract). Customer support for prepaid plans is separate, and it’s safe to say the experience is vastly improved. At least in my experience. With prepaid plans, the company knows it can lose you as a customer so it wants to keep you happy. Additionally, when you go prepaid, there’s no credit checks, no collections agencies hassling you for missed payments and unlimited data actually means unlimited. I’ve been a happy consumer of monthly wireless service plans since my iPhone 3G 2 year contract ended with At&t and I haven’t looked back since. I’m very appreciative to the tip I received back then and I hope you enjoy this groovyTip as well! I think the monthly service will still bring you out ahead. If you think about it, going monthly saves at least $500 in all cases. But if you want to go by averages, then the savings are more like $1000 for the average person. Then consider the average smartphone today, whether it be an iPhone, Android, or Windows Phone, costs around $500. No matter who you go with, no phone company will subsidize the full cost of the latest $500 smartphone. When I picked up the Samsung Galaxy from Sprint a year ago I still paid $200 for it despite getting a 2 year contract -and that was the best deal available at the time. In my case, I might have saved $300 on the phone upfront. But in the long run the 2 year contract was going to cost me an extra $1,440 – so I still lost $1,140 by not going prepaid. That’s enough to buy 2 brand new smartphones! Here’s the math listed out: – Sprint cost over 2 years [$3,120] – At&t prepaid over 2 years [$1,680] – Total difference between plans [-$1,440] 99% of the time there isn’t any exception to this. The only further advice I would lend is to wait to buy a phone when it first comes out. If you don’t mind being 6 months behind the latest and the greatest you can save another $200-300 by getting the phone on Ebay or discounted online vendors. Refurbs that include a warranty or have an added Squaretrade are just as good as brand new as well. Comment Name * Email *
Δ Save my name and email and send me emails as new comments are made to this post.
