“Prepaid.” This is the word that everyone continues to hear more and more of these days. No matter where you go, “prepaid” is a word that continues to creep ever closer into the common English vernacular. As a word, “prepaid” is the new fad of mobile electronics. Every mobile phone company wants to offer you a prepaid plan, something that was overshadowed by contract plans not too long ago (that lasted several years).
Why has prepaid become a new fad? For some, prepaid is something “different.” There are always fad followers out there who go for the latest fashion, accessory, device, show, and so on. If it is “new,” these individuals will throw down the old just to say they have something “new.” Prepaid phone plans work for these individuals because they want to feel as if they are part of the “in” crowd. For others, prepaid is the new fad because it is an untapped consumer base where phone companies can engage and make great financial strides. If a mobile phone company finds that its quarter profits are low, where can it turn? Prepaid phone plans will make up for what lacks with a given consumer base.
Whatever the desire to go “prepaid,” the new strategy has been a hit success. A little prepaid iPhone news will demonstrate. The first company to declare its original prepaid iPhone plan was Cricket Communications, owned and operated by Leap Wireless. Cricket placed its iPhone 4 (8GB, $399) and 4s (16GB, $499) at original iPhone prices while promising to charge a mere $55 a month for unlimited texting, data, and voice messaging. Although the “unlimited” data is not really “unlimited” (your data memory starts to dwindle after you surpass 2.3GB in the same month), most people will probably never surpass this limit; to them, there is no limit to the amount of fun they can have with their smartphones.
Cricket was followed in its prepaid iPhone plan by Boost Mobile, who announced their prepaid iPhone plan some days after Cricket. Boost Mobile’s prepaid plan has been announced though there are few details in the blogosphere at the moment. Boost Mobile plans to unravel its new prepaid iPhone plan this September—though, by that time, Virgin Mobile will have already rolled out its new prepaid iPhone plan for customers. Virgin Mobile’s prepaid iPhone plan requires an up-front phone price tag of $549 for the iPhone 4 (8GB) and $649 for the iPhone 4s (16GB). The unlimited data plan comes with 2.5GB of memory before your memory amount decreases, and original prepaid plans (starting at $35) come with 300 minutes of voice time. You can add more voice minutes and memory. There are those who want to have the smallest payment possible: if you sign up for an automatic payment from your checking, savings, or debit account, you could save an additional $5 per month.
What are prepaid iPhone plans? Prepaid iPhone plans allow you to purchase an iPhone (made by Apple) at a mobile phone company store (say, Verizon Wireless) that requires neither a contract agreement nor a two-year phone service commitment. For over the last decade, contract agreements have been the mechanism by which phone companies “lure” customers. Once upon a time, phone companies were afraid of prepaid phone plans. Companies used reduced prices on new phones for contract renewal as a way to retain and gain customers. Many customers were afraid to pay the expensive, up-front costs of flip phones and smartphones alike. Today, however, companies like Virgin Mobile have found prepaid iPhone plans to be a way to compensate Apple for purchasing its iPhones for a given period of time.
What are the benefits of prepaid iPhone plans?
- Lower monthly phone bill
- Unlocked iPhone
- Prepaid plans share benefits of contract plans
- Overall savings
One benefit of prepaid iPhone plans is that they provide a lower monthly phone bill than contract plans. As a US Cellular customer, I pay $88 a month for my phone service. The most expensive prepaid plan (somewhere around $65) would save me $23 a month in savings—for a total of $276 a year! There are many things you can do with $276 at the end of the year. Saving money is important in these hard, economic times.
Next, prepaid iPhone plans come with an unlocked iPhone. What is an unlocked iPhone? An unlocked iPhone is an Apple phone that can be used with any wireless phone company. When you sign a contract with a mobile phone company, your phone becomes tied to that phone’s cellular network. If you go outside of your phone’s wireless area to one that is not covered with your plan, then your mobile phone will not work. Contract agreements come with locked phones (in this case, locked iPhones), which restrict the area in which you can use it. If you decide to abandon your contract, the phone will not work because it can only be used on the mobile company’s wireless network. When your prepaid iPhone comes unlocked, it comes without network restrictions. If, for example, you purchase a prepaid plan and an unlocked iPhone 4s with Cricket for six months, then decide you do not want to stay with Cricket, you can carry your iPhone 4s to another wireless carrier without needing to purchase a new phone with the new carrier. You can always unlock your iPhone 4s and save yourself the trouble of having to purchase the phone at an expensive price.
Prepaid iPhone plans come with no contract. That means that, should you dislike your prepaid plan with one carrier, you can cancel the plan at any moment and move to do business with another wireless carrier. Contract plans often require a two-year commitment, and smartphone plans require both a phone two-year commitment and a data plan two-year commitment. Additionally, should you depart from a contract early (such as an AT&T contract), you will pay a $250 early departure fee. Contracts often lock customers into them for two years and penalize them financially if they choose to leave. With a prepaid iPhone plan, you can leave after six months or three months if the plan does not suit your taste. Prepaid iPhone plans also offer benefits of contract plans—the one exception being the up-front cost (you pay the full price of an iPhone on a prepaid plan, half the price on a contract agreement). An example of similar benefit is phone insurance. You need phone insurance to protect your phone from damage, such as cracking the phone open or dropping the phone in the toilet, and so on.
Lastly, prepaid iPhone plans allow you to experience more savings overall than contract plans. If you purchase an iPhone on a contract plan, you must commit to both the phone service and the LTE service for two years. For many, this means that their phone bill will run over $100 a month. When you purchase a prepaid iPhone plan, you can get the total package for much less. This is why Cricket can offer its unlimited text, data, and voice messaging in one package for $55 per month. Prepaid plans charge you half the contract plan price.
Prepaid plans are known for their more affordable prices and unlocked iPhones. If you want to unlock your iPhone 4s without affording a prepaid plan, feel free to do so.