Can you save money by dumping your standard cellphone plan for a phone that allows you to pay as you go? If you’re the right kind of user — and are careful about the plan you choose — you probably can.
“They’re perfect for people who need a phone for emergencies but don’t want to text message or use the Internet a lot,” said Jeff Kagan, a Georgia-based telecommunications analyst. “You can save a lot.”
Even heavy users can save money with the right plan, said Firas Naji, director of national sales for PlatinumTel Wireless. But you probably can’t be too picky about your phone because many pay-as-you-go plans are using last year’s models.
To understand who can and can’t benefit from these deals, you need to know how they differ from a standard cellphone plan.
With a standard plan, you sign a contract in which you agree to maintain your service for a set amount of time — most commonly two years — at a set price. In exchange, you usually get unlimited calling and receive a phone free or at a deeply discounted price.
You are effectively paying for the phone over time through monthly service fees that are slightly padded to account for the phone’s cost. If you cancel before the contract term is up, you’ll pay a fee that can range from $50 to $400, depending on the plan, when you canceled and the phone you bought.
With a pay-as-you-go plan — also called a prepaid plan — everything is a la carte. First you buy your own phone upfront, making sure it’s compatible with your chosen provider’s service.
Then you can buy a month’s worth of phone connection services, a set number of minutes (that will last for a month or longer), Internet access, text messaging or a bundle of these services.
You can choose to be billed …
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