US mobile carriersIf you have a contract with a mobile phone carrier in the U.S., chances are it is with one of the Big Four. These four companies are Verizon, AT&T, Sprint, and T-Mobile, and they control the vast majority of the U.S. phone market. The Big Four all operate primarily through contracts with their customers, whereas they provide a phone at a discounted rate in exchange for a commitment to their services, usually for two years.

If you’re happy with your contract that’s fine, but you should know that the landscape for mobile services is changing rapidly. Alternative mobile phone carriers offering fixed monthly rates and no contracts are becoming increasingly popular with consumers. These companies offer great values and low costs, but the question is whether or not they’re worth it. Everyone wants a cheap phone, but nobody wants a piece of garbage. Let’s look at what prepaid phones are all about.

How does Prepaid Work?

With prepaid phones consumers choose their plan each month. Some of these plans have a limited amount of minutes and data that you are allowed to use, but many are unlimited. Straight Talk by TracFone Wireless, for example, offers plans with unlimited everything for $45 a month. Plans like these are very liberating for consumers because they don’t have to ever worry about extra costs.

As with the Big Four, prepaid mobile phone providers offer their devices both online and in-store. Going online is usually the better choice of the two, because you can find special discounts and deals for your phone. You can find a Straight Talk promo code, for instance, for everything from a free Bluetooth head set to a free phone.

Don’t the Big Four have Prepaid Phones?

It is true that all four of the major providers now have prepaid plans, as well as “pay as you go” options. Prepaid plans with the Big Four tend to be less popular with their customers however, mostly because their phones are not always very high quality. As for “pay as you go” options, they are generally not worth it. Paying a set amount of money per call or text message can add up quickly. This option only makes sense for consumers if they know with absolute certainty that they will be making a specific number of calls or texts.

So why a Contract?

The best argument for remaining in your expensive contract is that it is required for many high-end phones. The iPhone 4, for example, requires customers to have not only a contract with a carrier but also a special data plan. Smartphones like this are very powerful, and cool, but they are also expensive. This brings us to the second reason why people often end up in contracts with the Big Four: price. Generally smartphones are priced so high that without a contract they are out of reach for consumers. To really have this point driven home, compare contract prices to non-contract prices next time you are at one of the Big Four’s retail stores. You’ll find that contract prices are typically at least $100 cheaper.

Think about what it is that you want to do with your phone. If your primary purpose is making calls and sending text messages, then you don’t need a smartphone from the Big Four. Prepaid mobile providers like Straight Talk are beginning to carry smartphones of their own for half the price of the majors. A contract only makes sense if there’s a very specific high-end phone that you want. If there isn’t, then lose the contract and save yourself some money!


Stefan Georgi has been an avid cell phone user and enthusiast for over 10 years. He recommends using a Straight Talk promo code for maximum savings.