Prepaid cell phones are no longer just for those with bad credit. You will also find prepaid cell phone equipment options very similar to their contract phone competitors. Like many families, we have been on a contract for many years with our cell phones. As our children reached high school age, we ended up with a contract plan with 5 phones on it. Over the years the bill has grown to point that something simply had to be done, and our kids are now all young adults.
Why Contract Phone Arrangements Are A Terrible Deal
My falling out with AT&T began a few weeks ago when my wife temporarily lost her phone. I went into our local AT&T store and explained to them the situation. I could not have been more clear about the situation, but I ended up in a complete nightmare nonetheless. The salesperson told me that based on my plan I could get a very basic phone for my wife for $1. All I had to do was to agree to keep this line for two more years, and I was fine with that. We had no plans of dumping AT&T.
I told her that this was probably a good option for us and that my wife would likely find her lost phone (which she did end up doing). I wanted to be sure that this was not going to cost me anything more than the $1. For example, I know that historically when I have picked up a new phone with them there were activation fees, a month in advance was billed, and all together it was not an insignificant sum that was added to my next bill. If that was going to be the arrangement on this 'temporary phone' I would have simply walked out without it and let my wife take a few more days to be sure that her phone was really lost.
My next bill arrived with an array of problems and new charges that I had not expected. Not only were there one time charges, but my wife's line was moved to a new plan (doubling the cost of her line going forward). This was just not acceptable, and I was very upset about it. I called AT&T and then said that I had to go back to the store where this all happened to get it straightened out. I attempted to call the store repeatedly and no one answered the phone (for three days). This went on for three days until I relented and went back to the store. Even after speaking with the store manager, the bill was still not completely corrected. In the meantime, we had been hit with more than $30 on our bill for going over the data in our plan.
We returned the little phone and had to pay $30 for them to take it back, and on and on... I had also grown tired of being the guy receiving the bill for more than $300 each month and then having to collect prorata shares from my adult children.
Making The Decision To Go With A Prepaid Phone
I had been reading about all of the great prepaid phone deals, but thought these would be companies with terrible coverage and off brand equipment. I need a good smartphone to keep up with my various Internet businesses and especially when traveling. My wife and I signed up with Virgin Mobile. We bought new phones for a total of $140. When the phones arrived, I was able to set up our accounts and transfer our phone numbers within a couple of hours. Honestly, I was shocked at how easy this all was. Had I known, I would have done this long ago.
Our monthly cost will be less than $90! We pay our bill in advance on the Virgin Mobile website and there will never be any surprises. No overages, no tricky salespeople to wrangle with, I just love it. My son also went with Virgin. My two daughters wanted to keep their iPhones and they went with StraightTalk. The only wrinkle with moving over to a prepaid plan is the issue of equipment compatibility. Most smartphones are programmed to only work with the carrier that sells them. I am sure that this is all about holding people captive (just like they used to do with phone numbers before the law was passed requiring to let you port your number when you leave). Virgin does have iPhones, but you can't take an AT&T iPhone and move it to Virgin. Straight Talk is a prepaid plan that works with AT&T phones, so this worked out perfectly for my daughters.
I bought my wife an LG Optimus phone for $69 and for myself an HTC Desire 510 for $86 (both Android). We are both very happy with these phones, having used them now for about three days. There are a wide variety of phones available for Virgin and the other prepaid companies. We bought these phones from Amazon, which has phones for all of the major prepaid plans at great prices.
Early Termination Fees
To get away from AT&T I had to swallow a few hundred in early termination penalties. It will take about six months for my savings to offset my penalties, but the savings for years to come made this an easy decision.
If you use your cell phone as a WiFi hotspot (like I do), one of the drawbacks of the prepaid cell phone plans is that many don't make available this option. I signed up with FreedomPop and bought a USB hotspot for $20. The plan I went with is $10 a month and should provide more than enough data for the occasions where I am away from home and can't connect to free WiFi. So, even with the FreedomPop subscription I am still below $100 monthly.
Do you have a prepaid cell phone plan? Use the comments section below, and we can start a conversation.
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