Defining Prepaid And Contract Phones
The typical mobile phone user subscribes to a contract with a service provider. A cell phone with a contract locks the user into a certain amount of minutes and services over the contract period. Cell phone companies offer varying contract lengths, though the typical contract covers two years of service. Contract phone services include monthly minutes, text messages, Internet access, and other features favored by consumers.
Mobile phone providers like Virgin Mobile© (http://www.virginmobileusa.com/) and Boost Mobile© (http://www.boostmobile.com/) offer prepaid phones as an alternative to lengthy contracts. A prepaid mobile phone allows a user to purchase a certain number of minutes at the start. As these minutes are depleted with day-to-day calling, the user is able to acquire more minutes as needed. The main difference between a prepaid phone and a contract phone is the former service can be terminated or altered without using a contract.
Advantages Of Prepaid Phones
High schoolers, college students, and young professionals in search of flexible phone service use prepaid phones. The reason why consumers have flocked to prepaid phones in the last five years is the increased restrictions on contract phone services. Mobile phone providers continue to tighten their contracts with higher penalties for minute and text message overages. The aforementioned demographics cannot afford to pay tens or hundreds of dollars each month in penalties on top of monthly rates. By purchasing minutes online or through brick-and-mortar retailers, young consumers can keep track of their minutes as they track their personal finances.
Another advantage of a prepaid phone is a simplification of services to basic calls and text messages. Consumers familiar with contract mobile services get frustrated with taxes, fees, and unnecessary services packaged into their monthly rates. Prepaid phones sold at big-box retailers like Target© (http://www.target.com/) and mobile phone kiosks eliminate these costs by providing the most basic phone services. While applications and games are unavailable through these services, prepaid phones offer inexpensive alternatives to mobile phone contracts for budget-conscious consumers.
Advantages Of Contract Phones
The main advantage of acquiring a mobile phone contract is access to the broadest range of phones possible. Prepaid phones are limited to the most basic flip and camera phones on the market to keep costs low. Mobile service providers like AT&T© (http://www.att.com/) and Verizon© (http://www22.verizon.com/) carry exclusive phones from Apple© (http://www.apple.com/), Motorola© (http://www.motorola.com/us), and Nokia© (http://www.nokia.com/) with the latest technology. Advancements in mobile phone technology mean that investments in contract phones are actually investments in MP3 players, planners, and portable computers.
Another advantage of using contract phones is protections and benefits provided by service providers to their customers. AT&T© allows a user to keep unused minutes each month for proceeding months, creating better value for the monthly rate. Mobile phone providers allow contract holders to pick up insurance policies and upgrade their phones throughout the duration of their contracts. The value of a contract phone comes not just from the investment in the phone, but the accumulation of applications, services, and protections through the end of the contract.
Restrictions On Prepaid And Contract Phones
Prepaid phones may not be the best value for your needs if you are concerned about per-service costs. Phone providers offering prepaid phones apply higher rates on text message, voice mail, and downloadable ringers than their contract phone counterparts do. Depending on your state of residency, you may need to pay state taxes on each minutes' card purchased. The lack of a contract means that a prepaid phone user has no recourse in case of damaged or lost phones. In terms of prepaid phone services, consumers are restricted by the lack of services offered through mobile phone contracts.
Mobile phone providers include plenty of restrictions on services and prices within their contracts. Consumers are drawn to free mobile phones offered by providers, but may not realize that these phones require two-year contracts. The typical mobile phone contract lays out penalties for excessive minutes and text messages difficult to understand for the average user. The biggest restriction when using a contract phone service is the inability to break the contract. Mobile phone contracts require users to pay the remaining monthly rates or a high one-time fee to get out of their obligations.
Choosing The Best Cell Phone Price
As we have looked at the differences between prepaid and contract phones, you likely thought about the impact on your bottom line. The best price on a cell phone is a subjective measurement based on your finances and phone usage. Your first step in finding the best cell phone price for your circumstances is to put prepaid and contract phones through a checklist. This checklist should include durability, monthly phone use, and reliability of service to determine the best cell phone price for your needs.
The durability of a phone is not only a measure of the phone’s construction, but day-to-day use. Construction workers and contractors need highly durable phones with covers to avoid structural damage for company phones. College students, young professionals, and others using cell phones for casual conversations need not worry much about durability. While consumers should avoid flimsy mobile phones when possible, a low durability requirement means that consumers can choose the least expensive contract and prepaid phones available.
The determining factors between contract and prepaid phones rest on monthly use and reliability. Frequent mobile phone users find it inconvenient to purchase minutes weekly in order to speak to their friends. A cell phone user making a handful of calls each month does not need hundreds of minutes included in a mobile phone contract. Contract mobile phones work well for callers looking for free night and weekend minutes as part of their monthly rates. Every consumer should look at a provider’s coverage map to determine whether to purchase a prepaid or contract phone. A prepaid phone may be inexpensive in the short term, but lack the coverage to meet your daily needs. On the other hand, frequent travelers should not buy contract phones with service areas restricted to local markets.
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