Using a Prepaid Cell Phone Company to Reduce Your Bill

By Anum YoonSeptember 25th, 2015Budgeting and Saving Money

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It’s the age of mobile. Everybody has a smartphone these days, and it’s to the point where if you don’t, you feel like you’re missing out. Quite honestly, that’s probably true. Being able to access the Internet no matter where you are is awesome. You can use a smartphone for GPS navigation, browsing social media, playing games, watching movies and web videos, reading eBooks and so much more. Then there’s texting, email, voice calls, VOIP calls over platforms like Skype, and video calls. Most of us know this by now – smartphones are the equivalent of a super computer that fit’s in your pocket.

The problem, though, is that smartphones are often expensive, and the mobile service to keep them active is just as pricey. We’re talking $80 or more a month per phone line, and that’s not even including the cost of extra data or a phone. What if you can’t afford that? What if you’re on a super-tight budget? Unfortunately, many consumers take on much more expensive cell phones and plans than they can realistically afford, mainly because they don’t realize how many options are really at their disposal. It may seem like you’re out of luck, but that’s actually not the case.

The good news is that there are quite a few budget-friendly prepaid cell phone companies — or service providers — out there. You just have to know where to look and how to leverage the savings.

Things to Keep in Mind when Choosing a Provider

Your financial situation may dictate your needs—in other words if you’re really out to save significant money to pay down debt or work toward another financial goal, then you probably don’t need a hotspot, unlimited data and the latest phone model. All of these factors will influence price significantly. At the same time, you do want to ensure that you get quality service and your basic needs are met. Even if it’s cheap, you don’t want to put your money toward something that isn’t reliable, so be sure to check out reviews of others who have used the service. And before you do anything, check the coverage map to make sure you will have service where you need it.

Which Service Providers Are Worth It?

We’re all familiar with the big players, like Verizon, AT&T, and T-Mobile, and they are shifting toward offering cheaper options. But for now, the best deals just might be found with some of these companies, who offer alternative pricing models:

• Republic Wireless
• Cricket
• Boost Mobile
• Straight Talk
• Ting
• GoSmart Mobile
• Platinum Tel (PTEL)
• Page Plus Cellular
• Virgin Mobile
• Metro PCS

The pricing models here can vary, and you’ll have to decide on what works for you. A steady plan (ie $35/month for unlimited everything) is convenient for most people. But, some providers offer plans that change in price based on usage, particularly how much data is used. Some, like Republic Wireless, even have refund programs so you know you will never waste unused data that you have paid for. Again, you’ll need to assess your needs.

Whatever you decide, be sure to understand the network your provider uses. Does it use the Sprint network, T-Mobile, or something else? People often have strong opinions about which networks are more reliable in a given area, but you’ll also want to check the coverage map. Providers generally tell you what network they are using through a logo on their website, addendum or small blurb. You will be able to work out these details pretty easily, but here are some more important tips to keep in mind.

Tip 1: Stay Away from Contracts

The companies mentioned above thrive on a pay-as-you-go model, and even most of the big wireless carriers like Verizon and T-Mobile are moving toward those models, too. Staying on a month-by-month plan is significantly cheaper. Yes, you have to pay for any new phones up-front and out-of-pocket, but there are several ways to handle this (more on that later).

Once your device is paid for, you can enjoy one of the best perks of using a contract—namely, the ability to hop on any network of your choosing if you happen to spot a better deal or cheaper plan. You will need to ensure your phone works with a network before switching, though. For instance, Verizon uses CDMA while most others use GSM, so not all devices will be compatible with Verizon’s network.

Tip 2: Say “No” to the Bells and Whistles

Avoid all the bells and whistles when signing up for a wireless plan. That includes things like insurance for your phone, roadside assistance, international plans or other devices like mobile-connected tablets or smartwatches.

If you absolutely must have insurance for your phone, look into a third-party company because they’re generally cheaper. Keep in mind, you will always have to pay a deductible if something happens to your phone and you file a claim. Because of that, you might be better off just “self-insuring” your phone, meaning that you put some money aside so that if something happens you can replace it.

As for roadside assistance, if you really need it, you can apply to AAA or find a credit card that also offers this perk.

Tip 3: Shop Around

Don’t settle on one company right away. Do some window shopping and find out what each of the wireless providers can offer you, even the big ones like Verizon, T-Mobile and AT&T. Sometimes, they offer exclusive deals that are of exceptional value. Some wireless customers have grandfathered plans that they signed up for long ago, and the provider is still honoring them.

Again, the best part about not being under contract is that if you spot a better deal after you already have service, you can just make the switch.

Tip 4: Dealing With the Cost of a New Phone

When you’re not under contract, generally you have to pay for the phone outright. That can seem intimidating at first, but you have option.

First, a lot of carriers offer an extended finance plan. You will make payments on the phone with additional monthly installments, and then once it’s all paid off, your bill will be shaved by about $20-$30 each month. But before you go this route, consider what type of phone you really need. Does it need to be brand new? If not, many providers sell refurbished phones at a deep discount. Also, ebay is a great source for used phones, though you will have to make sure the one you buy is compatible with the provider.

Even if you want new, chances are that you don’t need the nicest phone available. Consider not getting the iPhone6, and opt for a lower end model (LG and Motorola typically have great options in this category).

If you absolutely want to go after a new, feature-rich phone, then your best bet to circumvent the upfront costs is to wait a few months to purchase the phone and sniff out deals or short-term promotions that may lower the cost. Believe it or not, phone prices decrease often with so many new handset varieties constantly being released.

Cut Your Bills in Half (Seriously)

You’ve probably seen (and doubted) those commercials where people use chainsaws to cut their bills in half, but it really can be done. You will probably have the most success with a company that isn’t one of the traditional big-name players, so be sure to check those out first, and of course you should start by checking out the coverage maps and determining how much data you really need.

At the end of the day, your needs and the features you want will have the biggest impact on price. Be smart in your research and make sure you have all the information to make the most overall cost effective decision. And if you need more help with other items in your budget—call us, maybe?