Prepaid and contract cell phone services are intended for different groups of consumers. While contract cell phone services provide frequent users with a stable number of minutes and services at an affordable cost, pay as you go cell phone services allow infrequent cell phone users to pay for only the minutes they need. Before choosing between these types of services, consider your cell phone habits and needs.
Prepaid Cell Phone Service: Pros
Prepaid users pay for cell phone minutes up front through on-line credit card or prepaid card purchases in stores, and use the phone until they exhaust the number of minutes they purchase. At that point, users have to purchase a new set of prepaid minutes. The system is ideal for infrequent users of cell phones who do not use the number of minutes included in most cell phone contract plans. They can be a good tool for budgeting utility expenses and they can help parents control their children's cell phone use.
Prepaid Cell Phone Service: Cons
Heavy users of cell phone time may find that the per-minute charge in most prepaid plans is higher than contract charges. Because the service implies no long-term commitment on the consumer's part, phone equipment tends to be more expensive compared to the discounted phones carriers offer consumers who sign longer contracts. Where prepaid cell phones are less common, some users complain about poor connectivity.
Contract Cell Phone Services: Cons
Contract cell phone systems offer consumers little flexibility in how they use their minutes. Consumers are seldom reimbursed for unused minutes and sometimes pay for additional minutes at a premium price, as compared to prepaid programs where consumers can choose how many minutes they pay for and use in a given month. Contract services also require a long contract, which can be inconvenient for users who relocate to areas outside the coverage map of their service provider. Terminating a contract early usually comes with a penalty fee.
Contract Cell Phone Services: Pros
Contract cell phone services are ideal for regular users of a cell phone, particularly when their usage rates vary little from month to month. Contract service providers often offer discounts on equipment depending on the length of the contract signed. The minutes on a contract phone automatically renew from month to month. Contract services are a popular choice for professionals and other consistent cell phone users.
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