Are cellphone contracts good value?

Are cellphone contracts good value?

Are you saving money by getting a cellphone contract or choosing another option? There are many pros and cons to consider when you pop into a cell phone company store to set up a plan. There isn't a one-size-fits-all program. So are cellphone contracts really worth it? Let’s find out.

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Are you making the right decision by getting a cellphone contract? / © ANDROIDPIT

Unlimited Problems

Multi-year contracts have been around before smartphones. You used to have your calling plan with a specific coverage area and special times when calling was cheaper. Later plans included texting, usually with a limit to the number of messages you could send per month.

With the advent of smartphones and the overwhelming use of data, cell phone companies offer unlimited calling and texting with varying data plans. This was an easy decision for the carriers, since texting and calling had become cheaper over time as the infrastructure got better and the demand had decreased.

The problem is now that most of us use WhatsApp and don’t make many phone calls, we don’t really need unlimited texting and calling and end up spending money on services we don’t use. Our data plans run low and we are stuck with having to pay ridiculous amounts for extra data added on to our monthly plans. If you decide to grab an unlimited data option, expect to pay at least US$75 at the major carriers. High-speed will run you US$100 or more.

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Unlimited plans cost a bundle and often we don't use all of the services. / © ANDROIDPIT

The difficulties with a scheduled upgrade

Scheduled smartphone upgrades don’t fit with everyone, in fact, they fit with very few of us. The problem is manufacturers don’t work on the same schedule as the carriers. And your individual plan is set for a different upgrade time, it’s basically set when you originally went into the store. There a few variances, but most carriers give you a set time to exchange your device and if you want one faster you have to pay more.

Those of us who like to hold on to our devices until they stop working or are so outdated that we can’t really use them anymore are inhibited with the scheduled upgrade options. Sure, smartphones aren’t meant to last a lifetime but most easily make it through a two year contract. We don’t just get rid of other things that work perfectly well just because companies tell us to. If car dealers had trade in programs every two years you would be suspicious, right?

When a killer new smartphone blasts its way into the market there is always a temptation to go grab it. But then you have to think ‘oh is my contract ready for an upgrade?’ Well if it isn’t then you have to wait or end up paying an arm and a leg. Sometimes we just want to change our phone or we really need something different. The loss of freedom here is a big problem for scheduled upgrades.

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Scheduled upgrades are restricting and don't consider the longevity of devices. / © ANDROIDPIT

The times when contracts are worth it

If you use a texting service rather than a messenger service that burns your data it might be better to go with one of the big plans. Since most plans include free texting and a variety of data options, you can choose lower data with unlimited texting and really save a bundle. This could also be an option to try if you are looking to reduce your data. Check out our best texting apps article for some great options.

Some of you prefer to make a call instead of having a long texting back-and-forth. For you, it might be better to go with one of the big plans. Sometimes a call can be faster than messaging and you might want to consider this if you already have an unlimited calling plan from a carrier or prepaid.

If you like the upgrade every two years option, then a two-year contract is probably a good idea for you. You can then just go to the carrier when they tell you your phone is ready to be exchanged. This gives you a discount on the new device and can save you money if you prefer this system. Make sure you check out our Best cell phone company deals page so ensure you're getting the most out of your service. 

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Sometimes a contract is worth it but make sure you check out the deals first. / © ANDROIDPIT

The alternatives

Prepaid is the most popular alternative to the two year plan. There are tons of prepaid plans available and are able to be purchased from Walmart, Best Buy or Target. There are currently about 12 prepaid carriers available on Walmart’s site and you have lots of options to choose from. With plans like the Straight Talk Mobile Hotspot option you can really try to conserve your data though using hotspots when you’re out and about.

Google has released Project Fi to the public, you no longer need to have an invite to get it. How it works, is you pay US$20 for unlimited calling and texting per month plus US$10 for every GB you use. You are refunded for any unused data. It automatically uses Wi-Fi connections when possible. Check out our Project Fi page for more info.

Here’s another great option. Get in with a carrier like Sprint which offers incredible discounts when you switch to its service. Get a discount on an incredible mid-range device, basically pay nothing on top of your monthly coverage. Then, after your two year contract has expired, get prepaid service with the device from the two year plan. The best part is when this smartphone dies you can just go do it all over again. Carriers are so desperate to get your business that they will keep offering you discounted plans.

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Combining prepaid service with a contract is a great idea. / © ANDROIDPIT

Are cellphone contracts a waste of money? Let us know in comments.

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  • Good

  • Rusty Mar 17, 2016 Link to comment

    I've used prepaid service for 6 years now and never had any problems with it, I use Boost mobile and when I started it cost 50 bucks a month but with the shrinkage program my cost went down to 40 a month unlimited talk, text and 2.5 G data, if you use all 2.5 the speed goes to 2Gs so I've been very happy

  • Where I live it's cheaper (in most cases) to buy a phone without contract and get a Sim only contract. For my current contract I pay 18€ a month, I have 2GB data, 100 minutes or text.

  • In Poland or Austria you pay 5-10 $ for an unlimited LTE, Phone and SMS flat

  • I think this is a little out dated now. 2 year contracts are steadily going to the waste side with all providers. Verizon and most of the other major providers now do what is called in many different ways Device agreements. The drop your line fee and tack on the cost of the phone. In almost all cases making that really expensive 5 to 10 dollars more a month. Plus it's no contract, so if you like to switch to the new phones, you can just come pay off the remaining balance and get it. Also what you are not telling people here too is that per paid service means you either get a some okay phone for a cheaper price or spend 500 to 700 or more for the newer device. Also most prepaid get secondary use of towers, so that mean your signal can drop down to about nothing at any moment. I've done both and you get what you pay for, also Verizon has hand down been the best move and carrier I've ever been on. Strong and reliable. Sprint is the opposite.!

  • No messenger burns data but some professional works can't be done in messenger service.And many of us need texting to chat with people who don't use whatsapp.

    • surya this is not abt india hum apne khud k measurement rkhte....yr hm indian apne aap jugad kr lete h data ka....hehehehe

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