Why should you stay on a contract plan with limited data and pay twice the price when you can get unlimited data for half that and no contract? Many are reconsidering the idea.
Now may be a good time to start considering pre-paid phones. While in the past no contract often meant getting terrible signal and being stuck with an out-of-date, featureless phone, that may no longer be the truth. Pre-paid phones have come a long way and two of those services are now offering the newest iPhone to boot.
The Painful Part
This may hurt a little. If you want a pre-paid iPhone you'll have to pay for the phone's full price up front. The damage is a total of $650. While that may sound like an automatic deal breaker, it isn't really and you will likely still save money.
Getting a cheaper phone on a contract plan is much like making car payments instead of buying a car with cash. It may seem that you are only paying $200 for a fancy phone, but in the long run you are actually making larger monthly payments to compensate for what the phone company has lost by offering you such a cheap price for the phone. To make matters worse, in the end it also means that you are paying the company interest as well. Do you really want to pay interest on a $650 purchase?
Let's look at the Virgin Mobile plan for now, since they just added the iPhone to their offerings. Keep in mind that Virgin was bought out by Sprint, so service wise you will be getting the exact same coverage as any Sprint customer.
Initial Cost: $650
Monthly Cost for Unlimited Data,Talk, and Text: $55
Total Monthly Cost: $55
After 2 Years (No Contract Required): $1,970
Initial Cost: $199
Monthly Cost for 2 GB Data, Unlimited Calling/Text (cheapest): $60
Cost for Smart Phone Device (Required): $40
Total Monthly Cost: $100
After 2 Years (Length of Contract): $2,600
Initial Cost: $199
Monthly Cost for Unlimited Data, Talk, and Text: $99
Cost for Smart Phone Device (Required): $10
Total Monthly Cost: $109
After 2 Years (Length of Contract): $2,815
Sprint also charges an estimated $40 shipping free, whereas with Virgin Mobile you will get free shipping.
Those prices don't include family plans of course, but it isn't likely that you will save money that way either. Keep in mind that $55 is Virgin Mobiles most expensive plan, the cheapest one can be scored for only $35 which doesn't include unlimited talk but it does include unlimited text and data. Virgin also offers a $5 monthly rebate if you select the AutoPay option. With such a large price difference, even if you are fed up with your current service provider but stuck in a contract, you could still pay the average $350 early termination free and manage to save a couple hundred dollars.
What If I Lose My Phone?
Virgin Mobile also offers a similar insurance program to contract phones. At an average going rate of $5 on all phone services, you can still get all of the same security with prepaid as you do with contract- something you may want after throwing down $650 for a phone.