No Contract Postpaid Plans: Worth It?

The wireless industry is slowly changing as consumers are beginning to realize they don’t have to deal with cumbersome 2-year contracts anymore. In fact, when T-Mobile rebranded itself as the ‘Uncarrier’ and began advertising “no contract” and “contract buyout” deals, unhappy customers flocked to their pink savior, vowing to never again sign a contract. And the other carriers immediately took action and began offering the same ‘no contract’ postpaid deals that T-Mobile pioneered. But are these ‘no contract’ postpaid deals any better than a regular 2-year agreement or a prepaid phone plan? I’ll put out my pros and cons, and you can decide.

Postpaid Contract Plans

Once, 2 year contracts were just about the only option if you wanted a decent phone, but it was a bit of a gamble. You signed a legally-binding deal to pay for the service for two years and hoped that it would have service where you lived. Sometimes you were lucky. Sometimes you weren’t. But just about everyone had a contract, so most people didn’t think twice about it. Pros:

– Brand new phone when you sign on – Better coverage due to roaming on other networks – More reliable business; they probably aren’t going anywhere

Cons:

– Can only upgrade phone every 2 years (or pay full price + activation) – It’s a gamble if you get service where you need it – Locked in to service, for better or worse – Contract buyout/cancellation fees are often really high

No Contract Postpaid

A lot more recent, these service plans don’t involve a contract–but buying your phone usually does. Instead of getting a phone for free, you sign a contract to pay it over the course of 24 months. The friendly associates assure you that you can pay it off whenever, and then will try and sell you a $600 phone, full payment due if you cancel. Which, if you decide after a month you don’t like the service, is quite a chunk of change. Pros:

– Postpaid coverage – You can cancel the phone service at any time, so you aren’t technically locked in – Business is, again, more reliable than prepaid – Options to upgrade your phone more frequently

Cons:

– Phone payment contracts are similar to traditional postpaid contracts – Remaining Phone payments due upon cancellation of service – Plan prices aren’t as good – High-pressure sales

Prepaid

Prepaid phone plans offer a freedom that the other two services don’t. However, you do have to purchase your phone outright and companies frequently close and open, so there’s a chance you might lose your number with an unlucky company. Also, the service is sometimes not as complete as with a postpaid, as they oftentimes do not allow roaming on other networks. Pros:

– No contract at all — no commitment – Lower rates – Ability to change as frequently as you need – Only pay for what you use

Cons:

– Have to purchase phone outright – Coverage isn’t as good – Companies come and go quickly – Customer Service tends to be mediocre at best

So, what do you think? Are prepaid phones the best option? Are postpaid no-contract phones really that good of a deal? They all have downsides, but sometimes it helps to list it all out to properly decide. It just depends on how important it is to have a new phone, a permanent number and flexibility.  ]]>