For years Wireless Carriers have been baiting customers into the infamous Two-year contract
Every two years we put aside our old outdated phones and head on to our cell phone provider to upgrade to a shiny new phone and signing another two year contract thus reinitiating the cycle. This is how it’s been for years and for some people it might be a huge burden to pay these high monthly bills just to keep your fancy smartphone. The solution to this is to get as far away as possible from contracts and start using a no-contract plan.
The first necessity is to understand how two-year contracts work and why they cost so much. One of the major practices used by carriers in two-year contracts is known as subsidizing. This is when a carrier offers a phone for a lower cost, to make it more affordable, as long as you sign a two year contract. For example a new iPhone usually cost about $600 but the carriers subsidize it so that it only costs $200 with a signed two-year contract. The remaining $400 is added to your bill over the course of the two-year contract. In most cases the phone is usually paid off before the contract ends but you are still required to pay the monthly bill. In a no-contract plan you pay the full price of a phone, some carriers such as T-Mobile allow a monthly payment until you pay off the phone, and pay less each month. Also if you’re someone who takes good care of their phone and doesn’t need to upgrade you can ending up saving a significant amount of money after your phone is paid off. When you calculate the math for most people they will end up saving money using the no-contract plans.
Before you go into a no-contract plan it is important to consider who you choose. The first option would be to go with a local carrier. When looking at local carriers some factors to consider should be how good the coverage is, pricing, and data speeds. The smaller carriers are better to go with since they may have lower pricing but this is usually followed by slow data speeds or some other setback. Coverage is another important factor to consider since with a local carrier you may not get coverage if you travel to a different state or anywhere for that matter. The second option would be to use one of the major carrier’s no-contract plans. T-Mobile is the first major carrier to make no-contract plans their primary offering while other carriers such as AT&T and Sprint use smaller subsidiaries such as Aio Wireless and Virgin Mobile. One of the advantages that major carriers have would be the selection of phones since they have more options available or you can bring your own phone.
Overall there is definitely more than one option when it comes to your cell phone plan. The switch to no-contract plans are becoming more popular as it provides a better value and more option so you can find the plan that suites you.
