Frugal Living 

No Contract Cell Phone Plans

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Smart Mobile Phone Line-upOne of the main recurring expenses faced by modern families is the cell phone plan. By the time you pay for talk, text, and data, you could easily end up paying $100 a month or more for your cell phone plan — and with a contract you are locked into that price for two years.

Over time, that starts to add up. The good news is that many companies are now offering cell phone plans that don’t require you to sign a contract. You can get a plan for as little as $10 to $30 a month, and an unlimited talk, text, and data plan for as little as $50 or $60 a month. This is different from a prepaid cell phone. With the prepaid phone, you purchase a set number of minutes ahead of time. When you run out of minutes, you buy more. A no contract cell phone plan charges you a monthly fee for a certain number of minutes, or for unlimited minutes (and text and data, if you choose). However, you don’t have to keep renewing your monthly service if you don’t want to, and you don’t have to worry about fees for terminating your contract.

A no contract cell phone plan can be a good way to get the cell phone service you want, but at half the price. However, as with all financial decisions, your lower monthly payment comes with a trade-off.

You’ll Have to Buy the Phone

One of the reasons that so many people are willing to lock in a contract is that the phone often comes free, or at a much lower price. This is especially true of smart phones. When you are paying for a non-smart phone, at $30 to $80, it doesn’t seem like such a huge expense. You buy the phone up front, sign up for a no contract monthly plan that’s fairly inexpensive, and reap the savings.

Things start to get dicey with a smart phone, though. Smart phones can cost as little as $80 or $100, or cost as much as $500 or more, depending on the brand and model you choose. The iPhone is available now without contract, but it could mean paying more than $600 up front if you aren’t willing to commit to a two-year contract. That upfront price tag can be a little daunting for many people.

Consider what kind of phone you want to have before making the decision, and realize that you might need to come up with much more up front if you don’t decide to go with a cheaper phone.

You Can Still Save Money Over Time

Even with the higher up front cost of a smart phone, you might still save money in the long run if you go contractless. According to an article from CBS News, getting a base model iPhone with a no contract plan from Virgin Mobile costs $800 less in service and for the phone over two years than getting the same phone with a two-year contract from Sprint. That’s something to think about.

Before you make your decision, run the numbers. Get the details of what you will pay each month and multiply that by 24 (to reflect two years of service), and add it to the up front cost of the cell phone on each plan. You might be surprised to find that you are still better off with the no contract plan. Plus, you won’t have to worry about getting locked in for another two years, or paying fees, when you decide to upgrade your phone.

(Photo: Dru Bloomfield)

{ 19 comments, please add your thoughts now! }

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19 Responses to “No Contract Cell Phone Plans”

  1. Salvatore says:

    My contract with Verizon expired last month, I was paying just under $70 a month for voice and text only. I had an old school flip phone, no apps, no data. I just switched over to Virgin Mobile. I had to pay $100 for the phone, but now I have a plan with 1200 mins and unlimited texting and data for $45 a month. I’m loving it so far. I had to switch from the Verizon network to the Sprint network so the coverage is not as good, but from my perspective the savings are worth it.

  2. Noel says:

    IMO, it depends more on your cellphone usage, Minutes+SMS+data. If you use significant amount then contract is the way to go. If you don’t use it much then prepaid is the way you go. Don’t forget to look at MVNOs. More information on their service and other stuff can be found at Howardforums.
    I am currently using AirVoice Wireless (att MVNO) but as my usage surges, I will switch to contract.

  3. This is something I’ll have to investigate when my phone plan is up this year. The other thing is you can sell smartphones for a decent chunk of money even when they are a year or two old so factor that in too!

  4. Doug says:

    Virgin Mobile use to have a great plan for $25 a month with unlimited data and text and 300 minutes. That plan is now $35 a month.
    If you don’t use you phone much, and want to use a smart phone, look into Ting Mobile. My wife is paying about $18 month (with taxes) and if you amortize the cost of her $215 phone over 2 years it comes out to about $27 a month.

  5. Anthony says:

    My wife and I have Republic Wireless smartphones that will be delivered today. They are still in Beta, so you have to sign up and wait before you can get one, but they offer unlimited voice, text, and data for $19 a month with no contract. We had to pay for the phones up front at $250 each, but will easily make that up in monthly costs. These will be our first smartphones because it’s the first time we’ve seen a reasonable monthly cost offered.

    • I am about to do the same thing. I think I am going to go with the WalMart prepaid $45 a month for my wife at first while I try out the Republic Wireless deal. My wifes phone is also our primary phone # therefore I want to make sure one of us is on the more stable system.

  6. Melody says:

    I switched a few months ago from a Verizon plan to a month to month Straight Talk plan. I bought my smart phone for $169 at Walmart and pay $49 a month for unlimited talk, text and data. I love it and gloat a little when I hear what people are paying for the same thing on Verizon.

  7. DonnaB says:

    I too switched to straight talk. I had AT&T/$65.00 a mo for 400mins.and 200texts. When my contract expired I switched right to Straight talk. I now have 1000. min and 1000 texts for a base of $30. a mo. with tax it’s something like 32. a month. (I used same phone from AT&T- just bought a new sim card for $15.)- but I could have got a new phone for 30 bucks if I wanted one. I live in Florida (great reception) – I have also travel to Baltimore, MD and Phoenix,AZ with excellent phone coverage. 🙂

  8. Stephanie says:

    The problem we’re having with contract less etc is that many of the new service providers don’t have adequate coverage where we live. (in the sticks!) We have Verizon & just regular phones as I don’t want a smart phone. I would like to try Virgin Mobile or one of those but don’t know if I can try & then return and what a hassle. I still have 1 year left on this Verizon contract that I’ve had way too long for not much use, just a necessity for way too much money. I plan to explore when the contract is up this time because we need more ways to save.

  9. Stephanie says:

    Is there a list somewhere of all these providers? Or do we just “google it” I really want to change & the idea of getting a new phone for one of us and me being able to use what I have is great but living where we do, Verizon is king for coverage & I’m not sure that the unknown would let me make a call!

  10. Keith says:

    We use Page Plus and have the benefit of the Verizon network. $27.70 a month with 1200 minutes/3000 texts.

  11. Stephanie: I have tried a number of these phones. Metro PCS works great in Michigan, but not at all when we went to Montana in September, but my wife has Page Plus Cellular and gets 250 minutes for 12.00 a month,, and it ran on the Verizon network and she was calling the Dominican Republic (by using a special third party international long distance) from the top of the Continental Divide at 6300 feet just out of Helena. MetroPCS was running a flat 25.00 a month unlimited calling and texting and there were no taxes or other charges added. Straight Talk added about 5.00 a month for other charges on top of the 45.00 plan. For other plans, check as well. Crioket has a good plan for the Iphone 5, if you pay almost the full price for the phone to begin with.

  12. Melody says:

    My Straight Talk phone is using the Verizon Network also. I live in South Dakota which is Verizon country. I get great reception most of the time – the only time I don’t it when I am travelling in remote areas and then I only have trouble getting a data signal – always have phone service.

  13. Cindy says:

    We have a contract with at&t…with all the add ons it comes to 115 a month for 2 lines…I want to switch to different plan but am wondering can I tether with their unlimited data?

    • My son is a big Iphone user and tethered with the Straight Talk plan successfully, but it is bottlenecked after a certain amount of data usage. You may be disappointed. The Iphone 4S was able to take a sim card purchased through the Straight Talk web site, though.

  14. single mom says:

    I have used a trac phone for years. I bought it at the Dollar Store for $10. It has texting and calling which is all I need. So far this year I have paid $150 (from December 2011 until now) and I feel like I have enough minutes to last me through December of this year.

  15. Steph says:

    I’ve used Boost Mobile for over 2 years now, and I’ve never had any issues with reception. It runs off of the Sprint network, and it covers most metro areas as well as interstates & major hwys. Through their shrinkage plan, I got my bill down to $35 + taxes, which is just under $39 for unlimited talk, text & web. I just have a flip phone, so I never use the web, but if I choose to get a smart phone, my bill will be $5-10 more, which is totally affordable. As the article mentioned, you have to pay full price for the phone, but if you’re like me and use your phone until it falls apart, you’ll save a TON of money by the time you need to buy another device.

  16. Derek Knight says:

    I find in Canada this is hard to find a good cell phone without a plan. I was looking for a Rogers network MVNO or other. I hoped for rogers to rogers or fab 5 with little data and little text. We don’t even have cells now, but I love the idea of owning a smart phone so that I have a camera and computer in my pocket. Anyone got any sweet negotiated deals like this?

  17. ace carolla says:

    used to be on verizon. they raped me for several years. i dont like getting raped.

    switched to metro pcs like 5 years ago ish. smart phone with android 4.1 OS. not the greatest, but doable for a non techie like me. 50 bucks a month for unlimited everything talk text web.

    boo ya!


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