The majority of today’s phone contracts come with big incentives, including free or reduced cost smartphones. However, they also can lock you into less than favourable rates for two years or more. If you find that you rarely come close to your monthly minute allowance, or are nearing the end of a current contract, it may be worth exploring alternative options. One option that is becoming increasingly popular is a prepaid calling plan.
How Does Prepaid Work?
Prepaid plans have gone from being a novelty to a mainstream choice.
They now cover nearly a quarter of the mobile phone market, and come
with a variety of different terms and conditions. Generally, a prepaid
phone provides all of the same services that you would get from a more
conventional contract, allowing you to send texts, place cheap phone calls,
and access the internet. The big difference is that rather than signing
up for a long-term monthly payment plan, you pay in advance for a set
number of minutes or data. If you start to run out of minutes or data,
you can top up online or at a retail shop.
What are the Pros and Cons of Going Prepaid?
There are a number of variations within this basic framework, so the pros and cons of choosing a prepaid phone will vary. One advantage is that they offer you complete control over your phone use, rather than being surprised with a high phone bill at the end of the month. You will never go over your minutes unless you choose to pay for it. Prepaid phones are ideal for those with less than perfect credit, as no credit check is needed to purchase one. They often offer lower international calling rates than standard contracts, and allow you to switch phones whenever you like. However, a disadvantage is that you must pay for your phone rather than benefit from the discount you would receive from signing up for a longer contract. It’s also difficult for prepaid phones to match the low rates of a family plan, if you’re looking for a way to pay for phones for the whole family.
Comparing Options
The differences in per-minute rates, terms and conditions can vary
widely between prepaid service providers. You’ll want to shop around to
ensure that you find the best deal for your individual circumstances.
Some plans, like SIM cards with Lebara.co.uk,
are fully pay-as-you-go. These charge you by the minute, and then you
can top off your phone when your minutes run low. Others will offer you
unlimited use for a flat monthly rate, which you can opt to cancel at
any time. There may be additional fees or charges which is why it’s best
to read the fine print even with prepaid options. You’ll also want to
compare coverage. Some carriers specialise in international coverage,
while others won’t work in more remote areas.
Choosing a prepaid phone can make sense for many people, but it’s not for everyone. Generally, if you aren’t a heavy phone user it may save you money to opt for a prepaid plan. Yet a contract may be better for others, particularly if you’re in the market for a phone upgrade. It’s worth exploring all options to find the right financial fit.
source: everythingfinanceblog.com
