As consumers, we face many options when choosing a cellular phone subscription plan. There are prepaid and postpaid plans, and then there are which carriers to go with. In this article, I will briefly discuss each type of plan and another factor to consider: price versus coverage.
In my opinion, these plans are for those who use their mobile phones infrequently or do not require mobile connectivity for most days of the month. This type of plan eliminates the need to commit long-term by allowing you to pay only for services that you end up using. It offers flexibility at a lower cost than postpaid contracts because you can typically avoid charges such as activation fees and termination fees if canceling prematurely. A drawback of prepaid plans is that they usually do not allow for international roaming unless you purchase a separate plan from the carrier.
The two main types of postpaid plans are individual and family/shared plans. With individual postpaid plans, there is no contract. This means that service can be discontinued at any time without penalty (i.e., you don’t need to pay an early termination fee). However, to get the best deal with these types of contracts, many people opt to sign on for two-year or three-year terms to lower monthly fees by spreading out the up-front costs over time (I will explain how later in this article when I talk about “price versus coverage”). It’s important to note that a cancellation fee may be charged if you cancel early. They also do not allow for international roaming without purchasing a separate plan from the carrier.
Family/shared postpaid plans have a contract with carriers such as Verizon, T-Mobile, and Sprint, which usually lasts from one to three years or until contracts are canceled by the user. These plans offer discounts per line on monthly fees so long as at least one phone is added to the plan (which can be an individual’s cell phone).