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Don’t Waste Your Money: Are no contract cell phone plans worth the money?

Verizon, AT&T, and T-Mobile now all offer cell-phone service without a two-year service contract. It may sound like a good deal.

With no-contract deals you usually get lower monthly charges, but the plans can charge hefty prices for the phones themselves. Consumer Reports compared 78 cell-phone plans from 12 different carriers. It analyzed plans for three types of people: an average, single-user; a low-use couple; and a high-use family of four.

In all cases, Verizon proved more expensive without a contract than with one. For the family of four, the contract-free “Edge” plan costs more than $7,200 for two years of service and four new iPhones. With a two-year contract, that same family would pay $6,540.

With AT&T, the family of four would actually save by choosing the no-contract service arrangement. With a contract it’s $6784, without a contract its $6184. T-Mobile’s no-contract deal is even better for the family of four, at $5,600. And they’ll save even more if they bring their own phones: The price goes down to $3,364. Your phone has to be compatible with the new network, and you’ll need to switch out the phone’s SIM card for a new one, but that can cost little or nothing.

As for the low-use couple and individual user, Consumer Reports says Consumer Cellular’s no-contract service with installment payments for the phones is the best deal.

Consumer Reports says for individuals, other deals worth checking are Net10’s and Straight Talk’s no-contract plans. However, be aware that if you don’t bring your own phone, you’ll have to pay full price for the phone up front.

Filed in: News

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  • W R 3

    This is news? Your cellphone bill shrinks even more if you buy a more reasonable and/or capable phone than one made by Apple (thereby avoiding the “Apple [Name] Tax”).

    Also keep in mind: Net10 and Straight Talk are both run by Tracfone, and if you get triple-minute phones they are the best value in no-contract phones… plus, their network is practically everywhere!

  • Deepthi

    Although things are switching to a more “contract-free” world, there are still so many people in a contract. In order to more efficiently make that switch, Cellbreaker offers customers a way out of their current contracts without legally having to pay early termination fees.

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