How To Save Hundreds On Your Cell Phone Bill By Using A No Contract Or Pre-Paid Phone Service

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.

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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.

save hundreds on your cell phone bill

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).

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: 27th March 2014

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  1. says

    Hey Peter,
    Any tips and/or tricks on getting out of my Sprint contract? I’ve got about 6 months left on mine and my wife has about a year left on hers. I think we’ll still be able to save a couple hundred over the course of that year but man those cancelation fees are killer!

    Jeremy *.*

  2. says

    Hello Peter. I agree entirely on the NO contract phone services. I can not entirely agree with the pay as you go plans though. That type of cell phone service has always seemed so ridiculous to me based on their connection fees, not per call as much per day, about .99 a day. $20.00 can be depleted in less than a month without making more than 18 calls that last under a minute!

    To Jeremy on the Sprint plan,

    Look through your original contract agreement and see if they (Sprint) have a guarantee of QoS (quality of service) within the contract. If so and you believe their phone service has been short of what they state in the contract, you can bail out. There may be a limitation to the amount of months before you can file a complaint or back out however.

    If you can audit your own phone bill and find irrelevant charges, enough of them to date back to the beginning of your contract, you can use the disputed refund difference as your bailout for the cancellation fee ;)

    To everyone else, I personally have used Metro PCS (No Contract) for over a year and am extremely satisfied with their services although their coverage when hitting a rural area can be more shotty. Sprint has always been a favorite, but Metro PCS is my money saver. The new LG Esteem I just bought is an awesome Android product.

  3. says

    I’ve never had a prepaid phone, but it looks like the potential for savings is huge if you do it right. It seems like way more people should be taking advantage of this, too.

  4. says

    We just bought two phones using cyber monday, fatwallet’s link, our Discover card, and Peter’s coupon code.

    50% off the phones, cash back from fatwallet (if we did it right), 20% off the phones and cash back from Discover. WE’RE HITTING IT UP!!!!

  5. Bill F says

    Just recently I’ve been looking into moving to pre-paid service. We have had AT&T contract for years now and to be honest with you the service you get for the money you pay is not worth it one bit. I was considering Virgin Mobile and other Sprint MNVOs, but the Sprint network in our area is not so great. So that kind of puts a damper on anything that uses Sprint’s network.

    So I’ve been looking real hard at Page Plus Wireless. They are an MNVO through Verizon…which basically means they ride on the Verizon network as opposed to the Sprint network. Even though both companies use CDMA technology, the Verizon network is far superior for coverage in most parts of the country. They have a very cheap pay per minute plan and you can add on texting if you like. They also have a plan that gives you 1200 minutes of talk, 3000 text messages and 100MB of data if you want it. The other good thing is you can bring your own phone. If you have an old Verizon phone you can use that. Or you can find a good used one on eBay or Craigslist. The only thing you need to be aware of when buying a used CDMA is to ensure it has a clean ESN. I’d say if you really are interested in using Page Plus Wireless, do the buying through Kitty Wireless. They have a great forum and a good FAQ section that goes over the things you need to be aware of. And no…I don’t work for either company…I’m just a guy that has been doing a lot of research lately on pre-paid phones.


  6. says

    Between my husband and I, our cell phone bill is $135 each month. We both have iPhones, unlimited texting, and the lowest plan on minutes (we have rollover minutes). But, we both use our phones for just about everything…GPS, email, texting. Especially if he’s deployed (military) I have to know that I’ll always get his emails whenever he sends them, and if he calls, I know he’s calling my cell. So I might save a few bucks on a cheaper plan, but for me…I think I get my money’s worth=)

    Do you have a landline as well? On top of your cell phones??

    • says

      Yeah, we still have a landline on top of cell phone, both for the security system and because my wife prefers having a landline. Why I’m not sure.

      Out of curiosity, what is it that you can’t get by switching that you’re getting now with your $135 cell phone bill?

  7. Gina says

    Just cancelled our land line to switch our house number to a tracfone cell. So I went to do that while talking to ATT, I had to cancel my internet and reopen the account, since it was a new account I got the special for $29.95 a month (for the high speed). So I am saving a whopping $52.11 for phone and $19.05 for internet (for a year) so that saves me $71.16 a MONTH. That is a whole lot of enchilada! I get to roll my land line phone number over to the cell as well.
    For a yearly savings of $853.00 which will help me nicely to reduce my other debts this year.

  8. Chris says

    I am a VERY infrequent cell phone user keeping it in the car, turned off most of the time. On the flip side, I do occasionally like to get some data service (maps when driving mostly) which is difficult to find on pre-paid plans at low costs. Ultimately, I found to offer very low cost service and data. Although the phones are a generation behind, I haven’t found a better price anywhere else.

  9. says

    Well, we’ve been with Virgin Mobile for just over a month now and I must say it’s the worst cell phone company I’ve ever used. The phone was horrendous and overpriced. The network is weak at best and the 3G speeds rival that of 1G service at any other company. It actually takes me longer to do everything than it used to. As soon as we re-cooperate the costs of the switch I’m looking elsewhere.

    • says

      That’s really strange, we’re in Minnesota too, and the service for us has been great. The prices of the phones aren’t subsidized like they are at other non-prepaid services so they will tend to be more expensive, but still in the range of $100-200. As far as speeds I guess I’m not watching a lot of video or anything so I haven’t noticed the speeds being that slow, but we’ve been with them for a while so don’t have anything to compare to I guess. Sorry it hasn’t worked for you..

      • says

        Peter! You’re in Minnesota? No way! Does your wife know? :P

        Yes, I know the phones are unsubsidized and in actuality, the prices are resonable considering what the retail price is on most smartphones. But they still cost more out of pocket and the quality I’ve seen so far has not been worth the price. I actually bought the best phone VM offers in an attempt to lessen the impact of the change. It’s the worst smartphone I’ve ever used bar none. Extremely unresponsive yet strangly touchy, slow, GPS rarely works, poorly designed, etc.

        You said you don’t watch a lot of video…implying you watch some. It’s rarely an option for me unless I’m at home on my wifi. The 107kbps I’m seeing just isn’t really enough to buffer video. 3G from Sprint pretty much always ran above 1000kbps (1mbps) and sometimes 2mbps. Even checking Facebook is a chore. I basically have to start the page load, set the phone by the window and go get a Coke. Hopefully by the time I get back, the page is done.

        I don’t know how my wife’s data has been treating her but I do know when we’re in the car and she wants to use GPS, she’d be holding the phone as close to the window as she can hoping to get a signal and if it connects at all it’s usally around the time we figure out where we need to go and are almost there. I’ve only tried using my GPS a couple times and gave up. (She’s more patient than I am)

        If a VM smartphone user in the metro has a better experience, I’d like to hear from them. :)

        • says

          Aha, I just realized which Jeremy you are. ;)

          Did you buy the Motorola smartphone from VM? If so, I’ve heard horrible reviews of that phone – which is why we avoided it. My wife got the LG Optimus slider phone, and it’s been great. GPS works great as well, so well that we decided to forgo getting an actual GPS like we had been considering.

      • says

        Having said all that, I’m happy the experience is better for you PA. I’m just frustrated by what I’ve found so far and that it’s not really living up to the service as promised by the carrier or my already low expecations.

  10. Richard says

    I have been wanting to try tracfone lately ever since money has gotten tighter but I never thought they were innovative enough with their deals. I thought it was just pay minute by minute but now that i see they have unlimited thats unreal. Should I buy it from tracfone? or do you suggest another website. I know its time to make the switch and change.

  11. Emily D says

    I switched from AT&T to a no contract T-Mobile phone last month. Originally I signed on for the $30 plan that only includes 100 min. of talk, planning to use the GrooveIP app for the majority of my calls. However, I got so frustrated with the quality of the app calls that I finally just bumped it up to $50 this month for unlimited everything. Still saving $26+/mo. I have noticed coverage is not at all what it was with AT&T. Kind of wishing I did the Verizon prepaid plan, which is similar, because I’ve heard their coverage is better than T-Mobile. Live and learn!

  12. Ben says

    My wife and I went from paying U.S. Cellular almost $200 per month for their “unlimited everything” contract plan for smartphones. We are now using the very same phones, on the very same network, with the very same plan and paying $110 on their “unlimited everything” prepaid plan. I was dumbfounded when I found the plan in one of their stores. The brochure was tucked away behind all of their contract plans, so as to hide it from unknowing customers. The agent had the audacity to say “well, when you get back on your feet financially and want a better plan, come and see me”. I could have punched him in the nose! Really? I should have told him “well, when you wake up from stupid, let me know, and I’ll show you how to do math.” ugh. salespeople! ;)

    • says

      I’ll be honest, I hadn’t heard of Pure Talk until you brought them up. In some quick research it appears that they’re a Mobile Virtual Network Operator for the AT&T network, so if people get decent coverage and service with them, I’m sure Pure Talk should be fine too. What is your experience with them?

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