5 Reasons to Ditch Your Greedy Carrier and Go Prepaid in 2014

Verizon is Evil and their prepaid option isn't much better

2014: Prepaid is In, Two-Year Contracts Out

What? You’re still on a two-year contract? Get with the times! If  saving money and having freedom is in your 2014 resolutions, prepaid smartphone plans are the way to go. Last January my family left Verizon and went to Straight Talk with Google Nexus 4s. So far I have been nothing but pleased. I don’t make any money from Straight Talk and have no connection to them except for the service I purchase. I am simply very impressed with their service and can’t stomach the idea of anyone else tying themselves down to overpriced service for two-years at a time. If you like having more money in your pocket to pay bills or buy toys, jump past the break and see why you need to switch to prepaid now.

5 Reasons to Ditch your Two-Year Contract

  1. Save Money with Prepaid

    The cost of a two-year smartphone contract vs prepaid is not even close. Not by a long-shot. By switching my wife and I to prepaid, we literally save $50 a month over our previous contract we got in 2010! That was before Verizon, AT&T and Sprint decided to nickle and dime their consumers to death with data fees for every extra gigabyte. In fact, there is a good chance that breaking your contract and paying your Early Termination Fee and switching to a prepaid carrier right now is still cheaper than the total cost of your two-year contract.

    One of the biggest hangups people have is paying for the phone upfront. They see that the phone they want is a whopping $600 and go crawling back to their carriers. Here’s the thing, if you do the math, it is still cheaper to pay for the phone upfront and have a service that costs only $45 a month than $120 or more a month and get a phone for free. Seriously, do the math. When you sign that two-year agreement you are legally bound to pay $120 for 24 months regardless of if you end up liking the service or not. That’s $2,880. And that’s with a free phone. Tack on another $100 to $300 if you get a good smartphone.

    However, if you pay $45 a month for 24 months you are only paying $1080. You would have to buy a $1,800 phone to make it just as expensive as what you are paying on AT&T or Verizon for just the service. I know most of you readers don’t like math but sometimes Mr. Daley’s math class would help you be a little bit richer.

    Straight Talk is my prepaid carrier of choice

  2. No Contract with Prepaid

    Just like I mentioned above, a two-year agreement is a legally binding document. You are not legally allowed to stop your service unless you are willing to pay a steep penalty. Think of all the things that have happened to you in the past two-years. It’s quite a bit and there is no way you could have anticipated it all. Now imagine that (or perhaps it did) you have a situation where for financial reasons you had to stop service. The carriers don’t care for your sob story. They just want your money.

    Also think about what happens if you break your phone? If you are on a two-year contract you have to buy your next phone at full retail price. So now you end up paying full price for a phone AND you’re still stuck paying an arm, leg and first-born child to the carrier. If you’re on prepaid, even if you do bust your phone and buy another you’re still saving money.

  3. Join the World with Prepaid

    Most of the rest of the world is already doing the prepaid thing. They understand that your smartphone is more of a computer that makes calls than a phone that does computing. To get that kind of quality in a product it will cost some money. Also if you do go prepaid, make sure you buy an unlocked phone that is GSM compatible. The vast majority of international phone companies are on this standard. In the US, that means AT&T and T-Mobile. Also, if you buy an unlocked cell phone, using your phone overseas is as easy as popping in a prepaid SIM card you buy once you get there. WAY CHEAPER. You might not have LTE but you wouldn’t have had it anyway with an international plan with an American carrier.

    Also, going prepaid means that you can bring any phone you want as long as it is GSM compatible. Since most phone makers make phones for overseas, that means there is bound to be a GSM unlocked version of your dream smartphone.

  4. No Bloatware with Prepaid

    Part of how carriers get their subsidized phone prices so low is the same way most computer makers lower prices on their computers. They install bloatware that clogs up your homescreen and eats up system resources. If you buy an unlocked phone you will have none of that bloatware. Another additional benefit is that you are almost guaranteed to get operating system updates faster.

  5. Coverage is Good with Prepaid

    One of the biggest misconceptions about prepaid carriers is that their coverage sucks. However, their coverage is as good as the spectrum they lease from the big carriers. The way prepaid carriers operate is they “rent” space on the big carriers airwaves. Most prepaid carriers offer service on Sprint or T-Mobile bands. So if Sprint coverage in your area sucks, so will service on Boost Mobile. However, if you buy a SIM card that is compatible with AT&T you will have service anywhere AT&T has coverage. Which is to say, you’ll have good national coverage. While your mileage may vary, I’ve been in the back country all over Oregon and I’ve always had service wherever my father’s Verizon smartphone has. Wherever I didn’t have service, neither did he.

    One small caveat is that the customer service is admittedly not as good. However, that is a small sacrifice for only paying $45 a month for 2.5 gb of 4g data, unlimited voice and text messaging with top notch signal coverage. After the 2.5gb they throttle your data speed until the next month. This is much better than charging you another $10 or $15 for a gigabyte that you may or may not use completely.

So please if you like having more money in your pocket, do the math and see if it makes financial sense to go prepaid in 2014. If you are going prepaid the best place to buy your phone is either direct from Apple (for iPhones), Google Play Store (For Nexus phones) or NegriElectronics (for everything else).

Let us know if you are (or already have) going prepaid in 2014 by posting in the comments below!

Kenny Larson
Onetime Apple/Android/Windows fanboy. Now a firm agnostic when it comes to OS. They all suck in their own special way.

"Be excellent to each other."
--Bill & Ted

This article has 6 Comments

  1. Screw prepaid. Your also full of crap about having to pay full price for a phone if you break it while in a contract as long as you have insurance on it. Screw that slow throttled 3g service. I’d rather pay a little more money and have fast not throttled unlimited 4g with free tethering that’s faster than most dsl and cable internet. So have fun with your slow prepaid and cheap made phone.

    1. If you can afford it and are ok with being tied to a 2-year contract then by all means continue with what works for you. Most people nowadays are looking for ways to save money. Most people don’t need the insurance which will cost $200 over the course of two years. If you don’t upgrade at that point and keep your old phone that number goes even higher. $200 + the cost to replace your phone? Pretty close to buying one new off contract. Math doesn’t lie and I’m sure that if you do the math you’ll see that you are paying significantly more for marginally (if at all) better service.

      Also, reworld testing bears out that HSPA+ is, for all intents and purposes, as fast as Verizon or AT&T 4g is the vast majority of areas. I should also note that AT&T compatible LTE SIMS are available for prepaid carrier’s now, thus removing one more of your arguments.

      As to your point about slow prepaid phones? My Nexus 4 is neither cheaply made nor slow by any stretch of the imagination. Neither is the network. Speedtests are one thing, actual page load times are another.

    2. If you can afford it and are ok with being tied to a 2-year contract then by all means continue with what works for you. Most people nowadays are looking for ways to save money. Most people don’t need the insurance which will cost $200 over the course of two years. If you don’t upgrade at that point and keep your old phone that number goes even higher. $200 + the cost to replace your phone? Pretty close to buying one new off contract. Math doesn’t lie and I’m sure that if you do the math you’ll see that you are paying significantly more for marginally (if at all) better service.

      Also, reworld testing bears out that HSPA+ is, for all intents and purposes, as fast as Verizon or AT&T 4g is the vast majority of areas. I should also note that AT&T compatible LTE SIMS are available for prepaid carrier’s now, thus removing one more of your arguments.

      As to your point about slow prepaid phones? My Nexus 4 is neither cheaply made nor slow by any stretch of the imagination. Neither is the network. Speedtests are one thing, actual page load times are another.

Tell us what you really think.