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Educate Yourself: Know What You Get With Pre-paid Cell Phone Plans

A pre-paid cell phone plan, also known as a pay-as-you-go plan, is a plan in which you buy phone minutes in advance and do not have a monthly bill. If you think that this is the plan for you, there are several things you need to keep in mind before purchasing a phone. There are many advantages and disadvantages to pre-paid plans.

The Good News

A pre-paid cell phone plan is ideal if you do not intend to use it often. This type of plan allows you to only purchase the minutes you need, so you avoid paying considerably more for minutes and other features you do not intend to use. This cost effectiveness is also nice if you are on a tight budget but still need a cell phone.Pre-paid phone plans enable you to avoid having to deal with a contract. Many phone plans require you to commit to a contract for a specified length of time, usually two years. Pre-paid phones allow you to avoid financial problems if you frequently experience financial instability and have trouble with paying a monthly bill. In addition, unlike contracted plans, you have the freedom to cancel your pre-paid service any time you wish. This means you avoid cancellation fees if you no longer want your phone.Unlike many plans which require a contract, pre-paid cell phone plans do not require credit checks. If you have bad credit, this is the easiest type of phone for you to obtain. The credit checks are not necessary because the phone carrier takes no financial risk, since you purchase your phone and minutes in advance.

The Bad News

If you plan to use your phone heavily, you are likely to pay more per month for your phone than if you had a phone contract. The reason for this is that the cost-per-minute is generally higher for pre-paid plans. In addition, services such as texting also use up a lot of minutes so if you are someone who frequently send text messages, you need to purchase even more minutes.Pre-paid minutes expire. Depending on your phone plan, your minutes are subject to expire if not used within 30 to 90 days. If you are someone who seldom uses their phone, this potentially means having to purchase minutes you aren't going to use.Your choice of phones is likely to be severely limited. Many cell phone companies only have a few different models to choose from, so if you are hoping for a pre-paid plan using the latest trendy phone, you are likely heading for disappointment. These phones are also often more expensive, since phones with contracts are usually discounted as a way to entice customers to opt for a contract.

Depending on your financial and lifestyle situation, a pre-paid cell phone plan is sometimes the best option for you. Despite their convenience and affordability, there are many negative aspects to such plans. It is for this reason that it is wise to shop around and consider the pros and cons of pre-paid plans before deciding on a phone plan.

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