Sometime in the last few years, cell phones migrated from the list of discretionary wants to non-negotiable needs. Not only that, but the list of basic requirements and essential functionality for the average cell phone user has also grown, making flip phones that were cutting edge just a decade ago about as obsolete as the payphone.
With such high demand, cell phone providers are cashing in, charging exorbitant fees for basic plans and data packages, most requiring a long-term contractual commitment.
For those consumers looking for basic phone functionality that's a bit more budget friendly; however, the prepaid cell phone can provide a solution that satisfies both communication and savvy spending needs.
The PROS of Prepaid Cell Phones
Flexible Plans. Prepaid cell phone plans allow you to pay on a month-to-month basis, keeping you from getting locked into a contract you might not be able to afford or want later on down the line. Prepaid phones plans are also available without a credit check for customers with low or no credit scores who are unable to qualify for long-term plans.
Pay For What You Need. Depending on how you use your cell phone, you may be able to save by choosing a plan tailored to your specific needs. For example, if you're not much of a texter, you might save by paying per text rather than shelling out for unlimited everything each month. Some providers even have the option of a pay-as-you-go plan that charges you only for the minutes you use and the texts you send.
No Risk. Because prepaid cell phones don't require a long-term commitment, there's no risk in simply trying the service to see if it's worth the savings. If you find that the coverage is too limiting or the service insufficient, you can always change your plan the following month.
The CONS of Prepaid Cell Phones
Higher Phone Costs. Most traditional cell phone providers offer a "free" or seriously discounted phone every two years in conjunction with the long-term contract, whereas prepaid cell phone providers require you to purchase new phones in full upfront. In reality though, the price of the phone is built into the monthly charges of the traditional contract, so if you can snag a deal on your prepaid phone, you might still be better off.
Changing Phone Number. If you miss a payment or fail to renew your contract each month, you could forfeit your phone number- though this is easily avoidable.
Limited Coverage. Before committing to a prepaid phone plan, check the carriers' coverage in your region. While prepaid cell phones are available nationwide, coverage maps differ, particularly in more remote areas. Do a coverage search to ensure any places you regularly frequent will have sufficient service for your needs. Some prepaid cell phone service providers share towers with wireless giants like Sprint and AT&T, so you get similar coverage at a much lower rate.
For a list of top prepaid cell phone providers, check Money Saving Pros prepaid cell phone guides and reviews.