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Contract vs Prepaid Cell Phone Service

You're surrounded by so many different options when it comes to choosing your cellular service. That's a good thing, but it can get confusing! This article is designed to help you choose between contract or prepaid cell phone service.

Let's first discuss contract service.

There are advantages to choosing contract service, along with some disadvantages.
 
Let's talk about some of the advantages. One of the most major advantages is getting a discounted phone. If you sign a contract, you can usually get a phone for free. There are also many phones which are heavily discounted, at times even hundreds of dollars. Another advantage is customer service and reliability. There are some people that just prefer to stick with contract service because they know if there is a problem it will most liekly be taken care of in a timely manner. With some prepaid providers, customer service isn't good. That can result in aggrevation or loss of sales for a business.

There are also disadvantages to choosing a contract service. One of the main disadvantages is, well, the contract! You'll most likely need to sign a two-year contract to get the best deal with a contract provider. If you want or need to cancel your service before the contract is up, you'll most likely be charged an Early Termination Fee (ETF). Another disadvantage is the high monthly cost. Compared to prepaid providers, contract rates can be high.

Now let's discuss prepaid service. Like contract services, there are advantages and disadvantages.

To start, we'll talk about some of the advantages.

One of the most major advantages is the fact that a contract isn't required. This is especially attractive to those with bad credit. Another advantage is the good rates. Usually prepaid providers charge less than contract providers. For example, you can find unlimited everything on Sprint's network for $99.99 per month with a contract, or you can get unlimited everything on a prepaid provider for around $50 per month. That is a savings of $49.99 per month!

Of course, there are also disadvantages. The main disadvantage would be the cost of the phone. Since a contract isn't required, you'll need to pay full price for the phone. This can get very costly, depending on the device you choose. Another disadvantage can be customer service. Some prepaid companies don't provide good customer service, compared to some of the contract carriers.

Now, let's see what the best deal really is. We'll take into consideration contract service with a free phone, versus prepaid service with a comparable phone.

Let's start with the LG Enlighten from Verizon Wireless. The phone is free, with a two year contract. After choosing unlimited minutes, unlimited messaging, and adding 2 GB of data, the total comes to $119.99 per month.

Let's try to do the same thing with the prepaid provider Net 10 Wireless. The LG Optimus Q is $179.99 to start. The monthly plan is $50/month for unlimited minutes, text/picture messaging, and web/email.

Now we will do the math to see what is better long term.

Verizon Wireless:

1st Year Total: $1,439.88 (Including free phone and $119.99 monthly cost).
2nd Year Total: $1,439.88 (Including $119.99 monthly cost).
Total Cost: $2,879.76

Net 10 Wireless:
1st Year Total: $779.99 (Including $179.99 phone and $50 monthly cost).
2nd Year Total: $600 (Including $50 monthly cost).
Total Cost: $1,379.99

The better deal financially is Net 10 Wireless. Does that mean Net 10 Wireless is right for you? Not necessarily. Some might just feel more comfortable with Verizon Wireless.

The decision is yours! We just hope we've provided enough information to help you make a decision. If you're still not sure, just contact us at consultation@hildretech.com and we'll work with you to find the right provider for you.

If you're ready to sign up for Verizon Wireless or Net 10 Wireless, click on the appropriate link below.


To go back and see what other providers we offer, click here.

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