Whenever I hear about people spending $70, $80 or even $100+ on their cell phone bill every month, I have to admit that I’m usually a little shocked. I can’t imagine a scenario where I would ever pay that much, especially given that there are so many options out there to get cheaper bare bones cell service.
I will admit that at one time I gave in and paid for a premium phone and a premium monthly phone bill. At the time, about 8-9 years ago, that meant spending more than $40/month for our cell phones. While that may not sound like much now, to us back then it was a decent chunk of change.
One month after paying our bill, I decided that I was tired of paying for expensive service when we hardly even used our cell phones. I decided to look into cheaper options for cell service.
Pre-Paid Cell Service Is Often Cheaper
Far too often people who don’t use their phones very much end up paying for a premium voice and data plan with all the bells and whistles, despite not needing them. These bills can often easily exceed $100/month.
There is a cheaper way, however. It works especially well for people who don’t use as many voice minutes or use as much data. For example, I only use my phone to call my wife and a few other friends and family members, and usually only use a few minutes every month. I also don’t have a smartphone currently. For me spending money on an expensive plan was a waste. I found that there were pre-paid phone options out there that fit my needs, and would mean that I would consistently spend less than $10/month. So what pre-paid phone plans are out there?
List Of Cheap Prepaid Cell Phone Options
There are a variety of pre-paid, and even free, phone services out there that you can use. The frugality and savings you’ll see will vary from provider to provider. Here’s a list of ones that I’ve found that have some decent plans. (I personally use and love Virgin Mobile – so listed them at the top).
- Virgin Mobile
- Republic Wireless
- Boost Mobile
- Family Mobile
- Straight Talk
- Verizon Wireless
- U.S. Cellular
Pricing on the plans with the various companies tends to fluctuate a bit, so i won’t list that here. But what I can tell you is that for my family’s plan we get 2 no-frills pre-paid phones with phone service and texting for anywhere from $10-$20/month. If we wanted to we could upgrade at Virgin Mobile and get a Android smartphone and more minutes under one of their other plans starting at around $35/month. Still a pretty decent deal.
FreedomPop recently released a beta free cell phone service where you buy the phone from them and then the basic plan is free every month. How are they able to do that? The phone calls are made via the data networks instead of cell networks, so it’s cheaper for them, and then they charge for premium plans on the service.
How Much Can You Save With No-Contract Phones?
So the question is, just how much can you save by using a no-contract and/or pre-paid phone? Hundreds of dollars a year!
Let’s look at the average cell phone bill. JD Power reports in CNN Money, that
The average annual wireless phone bill is now $1,152, up 52% from 2006..
That’s somewhere around $96/month for a cell phone bill. Let’s say that instead of getting one of those high cost plans with voice/text/data, you got a cheaper no-contract version from Virgin Mobile. You could expect to pay around $35/month with Virgin Mobile for unlimited text/data and 300 minutes of talk time. That’s a savings of $61/month or $732/year! Even if you got unlimited minutes talk, the most you’d pay is $55/month – and you’d still save almost $500/year. I’m sure you could find a use for that extra money, right?
At our house we ended up switching to pre-paid service and saving around $300/year by making the switch. Not bad!
Cons of Pre-Paid Plans
There are a few downsides to pre-paid plans.
- You pay full price for many phones: With a lot of the pre-paid services you’ll end up paying full price for the high end smartphones, and not the subsidized contract cost. A lot of people don’t like that up front cost for the phone. Even with the extra cost for the phone, however, you’ll pay for it after only a few months of service and still save hundreds.
- Less phones to choose from: Not all the latest and hottest phones are available on a lot of plans, so if you want the latest iPhone, you may be out of luck.
- Pre-paid minutes can expire: Depending on what plan you choose, sometimes your minutes don’t transfer one month to the next, so be careful about what plan you choose.
- Extras sometimes cost more: You have to be careful about what plan you choose. Figure out what features you use (voice/data/text), and how much and choose a plan accordingly. Otherwise, extras like data can cost quite a bit more than you realized.
When you’re researching plans, just make sure to know what you’re looking for, what kind of a user you are and sign up for a plan that fits your needs.
For me moving to a pre-paid no contract plan was a no brainer when I realized how many hundreds of dollars we’d save every year. We’ve been with Virgin Mobile for 6-7 years now, and we love it! The service (on the Sprint wireless network) is great in our area, and we’ve never had any problems with their customer service. We now get 2 phones for less than it cost us for 1 phone – and if we want to at some point we can upgrade to smartphones at a fraction of the monthly cost. It’s a win-win!
While a pre-paid service may not be for everyone (especially for heavy users), there are ways to save, even with a contract phone. Pay only for what service you use, buy a lesser phone, or get your employer to pay.
Are you using a pre-paid or no contract cell phone service? What has your experience been? Tell us about it in the comments!
Last Edited: 2nd December 2013