There is no reason to overpay for your phone plan. Prepaid plans cost nearly half the price of typical postpaid plans and require no contracts or credit checks, so you can leave anytime. Lower costs, freedom and flexibility: these are the reasons to switch to a prepaid carrier.
What is the difference?
With prepaid subscriptions, a fixed amount of voice, SMS and data is charged at the beginning of the month. They don̵
Traditional ‘postpaid’ plans from AT&T, Sprint, T-Mobile and Verizon are practically the opposite of prepaid plans. You and the carrier agree on a certain amount of data, calls or SMS at the beginning of the month, but you pay at the end of the month. That’s why postpaid plans require credit checks and enforce overage charges. Of course, postpaid providers have been working on unlimited plans over the years, which are expensive but free of additional costs.
Can you feel the gears spinning? Prepaid plans have no hassle or obligations with postpaid plans, and they can save you a lot of money, especially if you don’t use a lot of data, minutes, or texts.
Why does prepaid cost less?
Who wouldn’t want to save money on their phone bill? Prepaid plans with unlimited data usually cost around $ 40, while plans with limited data (or no data) can be as low as $ 15 per month. That’s much cheaper than the postpaid plans offered by Verizon, AT&T, Sprint, and T-Mobile, which hover around $ 60 or $ 70 before taxes and device payments.
But why are unlimited prepaid plans (and prepaid plans in general) so cheap? Well, it comes down to performance. Prepaid customers are considered “low priority”, which means that they are the first to experience slow speeds or dropped calls in busy areas. Your prepaid provider may offer slower download speeds than the average postpaid provider, they can skip LTE hotspot data or limit all streaming video to 480p. These things, of course, differ between carriers and plans.
Prepaid customers may also experience throttling (reduced speeds) much earlier than postpaid customers. An unlimited postpaid plan can give you 50 GB of full-speed wireless internet before you slow things down, while an unlimited prepaid carrier could put the brakes on 30 GB (or sooner if you’re on a budget plan).
Of course, performance isn’t the only thing that keeps prepaid costs down. Prepaid providers don’t offer perks like BOGO phones or free Disney + subscriptions, which are often processed in post-paid bills. Plus, prepaid providers rarely ask you to pay an activation or service fee, saving you money when you need to switch phones or switch to a cheaper plan.
There are some situations where postpaid plans cost less. Postpaid carriers, for example, often offer big discounts for large families. And if you’re not sure which phone you’re using, the BOGO phone benefits or free upgrades offered by a postpaid carrier can save you a ton of money. But in general, prepaid plans are cheaper than postpaid due to reduced network performance and lack of perks.
No obligations, no credit check
One of the best things about prepaid plans is that they give you a lot of freedom. There are no contracts, so you can change your subscription or switch to a new carrier at any time. And because you pay at the beginning of the month, you don’t have to worry about being declined from a plan based on your credit.
But wait, aren’t most postpaid plans contract-free? Postpaid providers phased out contracts years ago, but they still use phone payment plans and early termination fees to trap customers. With “interest-free” device payment plans, interest accrues if you cancel your shift early, and it can be difficult to coordinate an exit if you share a plan with family or friends.
That said, some people may find it difficult to adjust to the prepaid living. Most prepaid providers expect you to bring your own device, and if your provider doesn’t sell phones, they probably don’t offer financing plans for prepaid customers. You may need to research phones yourself or buy a phone ahead of time if you can’t score a financing plan at stores like Best Buy, B&H, or Amazon.
Which prepaid plan should you join?
Now that you have an affordable prepaid plan, it’s time to go shopping! There are tons of prepaid providers offering great deals even for families. And because you can activate your phone online, you don’t have to worry about which carriers have a store near you!
To get you started, here are our favorite prepaid plans: