This topic is one that we have touched upon in some of the other articles on the site. Today, we wanted to really cover the pros and cons of each. Also, of course, mention how each type of coverage relates to international travel. The first thing that we want to point out is that different situations can benefit from different types of plans. Usually, long term plans serve families or larger groups better. Since, you can pay a lower amount per line, and get a new phone every so often. Yet, this type of benefit can also be achieved with prepaid plans, minus the new phone. From the data that we have gathered, it is safe to say many people are still in the dark when it comes to prepaid plans. If you find the right one you may end saving some cash! Which is better prepaid plans vs contract? Let’s find out
That does not mean that you won’t be able to find good deals in long term contracts. Again, they tend to cater more to family or large group needs. If you are an avid traveler you may be looking for freedom. One of the main reasons why we promote prepaid plans more on this site is precisely that! If you are looking for freedom a prepaid plan may be the way to go. If you are looking for stability then a long term deal can work. Your service provider can play a big role in the decision process as well. These are some of the topics that we want to cover in this article.
- Main benefits of prepaid plans
- Main benefits of long term contracts
- What ultimately costs more prepaid plans or contract long term?
- Getting into a long term deal because of the “free” phone
- Prepaid plans vs contract: Which is better when traveling
- Unlock a phone on a long term deal
- Best mobile carrier for each option
Main benefits of prepaid plans
Prepaid plans basically equal freedom. If you have a prepaid plan you can set your budget every month. If you happen to be an avid traveler that can be great. Since you could potentially have the opportunity to lower the amount of money that you are going to be putting into your prepaid plan for that month. Which is going to allow you to have a higher budget to be able to invest on a foreign SIM. If you don’t like the rates that you are getting from the particular company that you are getting coverage from at this point in time you can switch pretty much any time that you want.
Of course, another one of the main benefits that you are going to be able to obtain from these types of plans is that you are not going to go over budget. This is something that kills some phone companies. So, they may try to come up with ways to get you to spend a bit more on your monthly cycle than you regularly would. By selling you extra data if you run out and things of that nature. If you are really disciplined though about the way that you handle your data usage you are not going to have a major issue. If you are no longer within the family plan prepaid deals can be a better option. For the most part, you are going to be paying the same price per line as you would on a long term deal on your own. In a longer contract, you may get tied down because that particular company is essentially leasing you your phone.
Main benefits of long term contracts
The price of long term deals can go down per line after you add a couple of lines to the plan. That is why you are typically going to see families in long term plans. Also, they make it “easier” for you to upgrade your cell phone every couple of years. Again, this one of those things that can be an advantage for families. Granted you could just buy a phone directly from the manufacturer with your credit card. So, getting tied down because of a phone is not a great business decision. If we are being honest, usually you are going to be able to obtain more coverage at a lower price on a long term deal. You give up some freedom though to obtain this!
It is not that you are going to get bad coverage on prepaid plans. Yet, it is more likely for example, that you will be able to obtain 5G coverage on a lower-tier long term deal. If you pay the lower end prepaid plan you are going to be getting 4G coverage at best. Also, it is more likely that you will be able to obtain coverage at a lower cost. You have to take this with a grain of salt though. To be able to considerably lower the price per line you need to have various people signed up under one contract. You don’t necessarily need to be family to be able to sign up for a “family plan”. If you are going to do this it is a good idea to sign up with people that you can really trust.
If you are someone who is not big on buying new phones just getting your phone upgraded periodically with the long term deals can be fine. You won’t have to search the web for the newest phones you may just be getting one every year and a half or so. These are things though, that in this day and age you can get directly from the manufacturer. Apple has a membership plan that gives you access to new devices. Without you having to have a long term contract with a service provider. Getting everything from your service provider though can make things easier overall.
What ultimately costs more prepaid plans vs contract long term?
This question can be hard to answer directly. If we are just talking about the cost for a prepaid plan for 1 line and a long term deal for 1 line you are actually going to have lower-cost options on prepaid plans. Take T-Mobile for example. Their middle of the road prepaid plan can give you 10GB of coverage for 40 dollars with autopay. The long term plans that they are selling these days start at 60 dollars for unlimited coverage. You can actually get a prepaid plan with unlimited data for 50 dollars. The problem is you are going to drop from 4G speeds to 3G speeds after you spend a considerable amount of data.
Here is where things really start to separate themselves. If you have 4 lines on your long term contract you can get prices of about 30 dollars a line for the basic unlimited plan. You would be getting around the same rate if you have 4 lines on a prepaid plan. The difference is that with the basic prepaid plan you don’t get unlimited coverage. If you look at it really closely though, the differences end up being nickels and dimes. At the most, the differences are going to be a couple of dollars. If you have both an autopay. If you are paying cash month to month you can expect to pay around 10 dollars more per plan for the monthly coverage.
As was mentioned before, it is really a nickels and dimes difference. If we had to narrow it down to the “bottom line”, you would have to ask yourself what is more important. Would you rather have access to a new phone every year or so? Is it more important for you to have the freedom and be able to pay for the coverage that you actually plan on using for the month? As far as the costs they are pretty much the same!
Getting into a long term deal because of the “free” phone
Many people believe that it is a great idea to stay in long term deals just because you can get a new phone every x amount of time. Is it a good idea though? There are certain things that you may need to consider. The first thing is, what is the value of x? If you are going to be able to get a new phone every year this could be a deal that makes a lot of sense. If you are going to be entitled to a new phone every other year, the whole landscape can change. Especially if you or someone in your family plan is not really cautious with their phones. Of course, you can buy insurance policies from the manufacturer. That is an extra cost though, that you could also get with a prepaid plan.
Now, there are certain situations where getting into these deals could make sense. As we mentioned before if you are the head of the family and you are paying all of the money for your 4 or 5 line plan then you may not want to have to pay for a new phone for each person in your family every couple of years. If that is the case then this plan can totally make sense. In a lot of ways it makes things easier for you. You are not going to have to worry about the new phone that just came out. The sad part is, usually with these deals you are always getting the next best thing. You are going to be getting last year’s iPhone and things like that. Again if that is not something that bothers you or you sincerely don’t have a better option then go for it. Just make sure you fully understand what you are essentially getting yourself into!
Prepaid plans vs contract: Which is better when traveling
All throughout the site we basically preach that if you happen to be an avid traveler you are always going to be better off on a prepaid plan. That is not to say that you should switch to a prepaid plan if you are going to take a trip. The reason why prepaid plans work better for traveling is that you can regulate your spending. You can choose to only add a small plan for the month that you are going to be away. You can do this to just keep your regular phone active. You could even take a bigger risk and not pay any monthly fee whatsoever for the time that you are going to be away. Instead taking that money and putting it towards a foreign SIM card. If you are someone who is not really concerned about having to change phone numbers constantly this can be a good idea. Essentially you could just pay the fee for the number of days that you spend in a particular place.
Traveling with a regular plan can be difficult. First, if you are going to want to look into the foreign SIM card option you are going to need to make sure that your phone is unlocked. If you got the phone from your service provider there is a big chance that in fact, the phone will be locked. If you don’t configure your coverage correctly there is a good chance that you are going to have to end up paying roaming fees. These are fees that you are going to want to avoid at all costs. Roaming fees can add up to ridiculous amounts. Again, we are not saying that you should switch to a prepaid plan if you want to travel. You are probably going to have to be more careful when you do travel. To avoid extra costs as we previously mentioned.
Unlock a phone on a long term deal
We have other articles on the site about unlocking cell phones. It can be a complex process and we don’t want to get into it as much here. What we will say is that if you are looking into the foreign SIM card option you need to have an unlocked phone. There is just no way around that. How do you know whether or not you have a locked phone? Usually it is pretty simple. If you bought the phone directly from T-Mobile, Verizon, AT&T, or whoever, and you have never switched companies there is a pretty good chance that your phone is locked. This means that is will only take SIM cards from one particular company.
If you are going to travel it is a great idea to make sure that you get your phone unlocked before you leave. If not you could end up needing to get your phone unlocked while abroad this need can take you to some places that you just don’t want to be at. You can even get through this process on your own. There are different ways that you are going to be able to do this. If you decide that you want to get your phone unlocked make sure that you have your data properly backed up. Otherwise, you can attempt to unlock your phone and instead pretty much wipe it clean of any type of information. Of course, that is less than ideal!
Best mobile carrier for each option
This is one of the toughest questions that we may have had to answer. There is no one straight answer. As we have mentioned before, Sprint had a good deal for their clients. Who, could get data and calls abroad for 50 dollars a week on their international pass. Since the merger with T-Mobile, this advantage may have gone away. This means that using your regular phone on a long term deal with each of the current main service providers is going to cost you about the same.
At least, if you happen to have a long term unlimited plan. The costs are usually set as follows. For coverage in Mexico and Canada, you can pay 5 dollars a day and use your unlimited plan regularly. Anywhere else in the world the rate is going to be 50 dollars a day. These day passes are basically available for people with unlimited plans. If you have a long term plan that is not unlimited your options while traveling are going to be pretty slim. Pretty much diving into roaming costs or pay as you go plans, which with Verizon and other providers are basically roaming. The costs are just out of this world.
As far as prepaid plans go coverage in Mexico and Canada may actually not be that bad on your regular plan. Verizon and T-Mobile will both allow you to pay a 10 dollar fee on that month on top of your regular coverage costs. These 10 dollars though are going to allow you to have pretty decent coverage in Mexico and Canada. In other parts of the world coverage on your regular plan is going to be quite limited. Having a prepaid plan with any service provider usually means that you have an unlocked phone. This is going to make getting a foreign SIM card a whole lot easier! Based on what we’ve mentioned what works best for you? Ultimatly deciding the winner of “prepaid plans vs contract” is a personal choice.