Prepaid wireless is a clear trend: The fourth quarter of 2009 marked the first time that customers signing up for prepaid cell phones outnumbered new subscribers opting for contracts.
Yes, going prepaid can save you money, but it doesn’t work for everybody. If you have a good sense of how often you use your cell phone and it’s actually in the realm of possibility for you to limit usage when necessary, if you’re OK not having the coolest new feature-laden handset, and if you really, really hate the idea of an early termination fee, in which you’ll be charged as much as $350 for trying to get out of your wireless contract, then it’s time to take a close look at prepaid.
Monitoring your minutes and being disciplined with usage is the simplest way to come out ahead with a prepaid plan. A SmartMoney post says that people who use 100 or minutes or less a month are almost always better off with prepaid. For tons of folks, however, 100 minutes—or even 500 minutes—doesn’t come anywhere near their needs. There are those who eat up 100 minutes every, oh, 100 minutes or so.
Even these folks might be candidates for prepaid, albeit obviously with the unlimited prepaid option. Unlimited talk and text options start for as little as $25 a month, and the highly praised prepaid Straight Talk phones start at $30 a month, $45 monthly for unlimited usage.
But when is prepaid not a good idea? Well, if you choose a monthly allotment of minutes or just pay by the minute, and then you wind up using your cell phone a ton, you’re not going to be saving money. You’ll probably be spending more than if you’d gone with an unlimited prepaid plan, or even with the standard old monthly wireless contract.
The real hang-ups—excuse the pun—for people nowadays are all the bells and whistles that in all likelihood they’d have to forego with a prepaid cell. If you’re an app-aholic, you probably won’t be happy with prepaid. On the other hand, if you have a fully loaded smartphone but you take advantage of its high-tech capabilities only sparingly, then you’re paying for stuff you’re barely using.
