Pre-paid vs. Contract Phones

A really good way to cut down on those expensive cell phone bills is to evaluate how you use your phone. If you can really evaluate how often and how long you use your phone, switching from one type of payment plan to another can save you hundreds of dollars a year!

A prepaid phone is one that you prepay for your minutes on. It's basically pay-as-you go. If your phone is used solely for emergencies and that is all, then prepaid is the way to go. A contract can stick you with hundreds of dollars in payments for a year; while with a pre-paid phone you could have continual service for sometimes under $100.00 a year. Virgin Mobile has an excellent program where you can pay for phone service for $20.00 every 3 months, that's only $120.00 a year! You can switch companies anytime with prepaid phones without worrying about early termination charges making them ideal for anyone who doesn't want to commit to a particular company.

A contract phone is one that you pay for your minutes after you use them. This type of program is great for someone who talks on the phone consistently, texts consistently, or would like to access the internet. Sprint has a simply everything plan where you get unlimited talk, text, and minutes for only $100 a month. This is very beneficial to anyone who needs their phone on a regular basis. There are plans that are less costly for someone who talks a lot, but may not want other features such as internet and texting. With a contract phone it is important to make sure that the plan you choose fits your talking habits. Charges for going over allotted monthly minutes can be costly if you run over them a lot. Also, choose a company that you know that has good coverage that you'd like to stick with for a while--contracts are usually from 1 to 2 years and getting out of them often costs about $175.

So to save money, evaluate your cell phone bills and see what works for you. Again, that could mean saving hundreds of dollars in the long run.