Prepaid vs Contract Cell Phone Contracts

Contract vs prepaid

It’s a conversation we have all had at some time or another. Which is better, a contract with a cell phone service provider, or going the prepaid route. Well, as with everything today, there are the pros and the cons associated with whichever way you wish to go. Let's have a look at the various pros and cons of having a cell phone contract and prepaid. When it comes to a cell phone contract, it must be noted that not all service providers are alike and there may be different terms, conditions and options for you to consider.

Cell Phone Contract Pros:

• Customer service

As stated above, no two cell phone service providers are the same, but generally speaking, you will get better customer service as a contract holder. You have signed a two-year contract with the service provider so it makes sense for them to keep you as happy as possible, ensuring that you renew your contract with them when the time arises.

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• Network

When the service providers network becomes congested, who gets the highest priority? You guessed it, the contract holder will be on their preferred list as opposed to the prepaid customer.

• The cell phone costs less

With prepaid, you have to pay for your phone upfront, whereas, if you sign a contract, you will pay a smaller monthly fee where the cost of the phone is subsidized by the service provider through higher plan rates.

• Lower call rates

With a cell phone contract in place, you will benefit from lower call rates per minute.

• New phone

With a cell phone contract, you can get a brand new cell phone device every two years, along with other options such as add-on services and special offers when it is time to renew the contract.

Contract Cons:

• More expensive

Signing a contract may get you your dream phone cheaper up front, but the actual monthly costs are much higher than prepaid.

• Less freedom

Signing a cell phone contract locks you into the service provider for two years.

• Limited cell phone choice

In many cases, signing a cell phone contract with a service provider limits you to the choice of cell phones and contracts they have on offer.

• Monthly fees

With a contract you have an activation fee, an access fee etc. contracts always have annoying fees attached.

Prepaid cell phones

If you want to save on the monthly costs and have the freedom to choose whichever phone you wish to have, then going prepaid is an attractive option.

Prepaid Pros:

• Savings

The savings on prepaid is the biggest advantage, once you go prepaid you will see a noticeable drop in monthly cell phone expenditure.

• Credit checks

If you have a low credit score rating and the chances of getting a contract approved are slim, then prepaid is a way to avoid the embarrassment of a contract rejection.

• It's your phone

Most of the time, having a cell phone contract with a service provider locks the device to their network. With an unlocked prepaid cell phone, you are free to choose whichever service provider you wish to use.

• More choice

With the prepaid approach, you are free to choose any brand of cell phone and model you desire. You will not be restricted in terms of any specific phone offered with a cell phone contract

Prepaid Cons:

• Full price

By going prepaid, you will have to pay full price up front for the cell phone you wish to use

• Priority

As you are prepaid and not a contract holder, you will not be prioritized on the service providers network

There are many pros and cons associated with both options, but at the end of the day, you need to make the choice which is right for your pocket and your circumstances.


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