Pros & Cons of Different Types of Cell Phone Plans

By Affinity Cellular - 2019-11-25

When choosing a phone plan there are many factors to consider. What will my monthly payment be? Can I switch providers? What amount of data will I receive? The answers to these questions can help you decide what type of phone plan is best for you. There are three main types of phone plans: prepaid, postpaid with no contract, and postpaid with contract.

Prepaid Phone Plans
Prepaid phone plans function much like they sound. You pay for the services you receive each month before it begins. These services typically include a certain amount of talk, text and data for a 30-day time period. At the end of each period, your services are shut off. You can then either renew your plan or choose a different plan. 

There are many positives to using a prepaid plan. The biggest perk is the flexibility it gives you. Because you are only paying for 30 days at a time, you are free to switch providers, choose a different plan, or stick with your plan at the end of each month. The range of options, specifically for data usage, means you only need to pay for the services that you plan to use. Additionally, prepaid plans are available for individuals with low credit scores that may not qualify for long-term plans or can only do so by paying a premium.

One downside of prepaid plans is a higher initial investment for the phone itself. While postpaid plans offer discounts on the phone, most prepaid plans require you to pay the full amount up front. This makes it harder and more expensive to upgrade to newer phone models. Additionally, you'll need to manually renew or change your plan at the end of each period. Finally, prepaid plans often offer fewer perks than postpaid plans do. 

Postpaid Plan, With Contract
Postpaid contract phone plans typically lock you into a set service and data plan for a time range of one to two years. As part of this plan, the price of the actual phone is often divided into payments over the course of your plan, and then payments are charged to you at the end of each month. The payments reflect the base rate that you select, the cost of the phone (if applicable), plus any overage charges based on your actual data, minutes and texting used. 

Postpaid plans typically offer more perks in exchange for staying with the provider longer. One benefit is the option to upgrade the model of your phone as you near the end of your contract. If you are interested in getting the latest phone models, this is a good option for you. 

While there are benefits to prepaid contract plans, they are very inflexible. If you don’t like your provider or are not happy with your plan, it is difficult to get out of the contract. Even if you are able to, you will likely have to pay high fees. Additionally, the monthly payments may be more expensive to account for the phone payments. The payments also increase if you exceed your predetermined limits. And for individuals with low credit or a negative history with other providers, it may be difficult and more expensive to get a postpaid plan. 

Postpaid Plan, No Contract
Postpaid no contract plans are a mix between the first two options. You still get billed at the end of the month based on selected services and data usage, but you are not locked into a 1-2 year contract with a provider. 

The postpaid, no contract plan offers many of the benefits of a contract plan but with added flexibility. And unlike the prepaid plans, you won't need to re-up at the end of a billing period. Different service providers offer different options for phones. It often possible to bring your own or purchase one from the company.

The postpaid, no contract plan is what we offer. In addition to our low-cost offerings, you're also able to adjust your plan during times when your phone usage is likely to increase or decrease by calling our customer service team in advance. 

These three types of phone plans all come with pros and cons. Based on your own interests and cell phone usage, one plan might be better for you than another. Decide what type of plan fits your needs, and enjoy the perks it has to offer!