No-Contract Cell Phone Plans

Michael Kwan
Choose a No-Contract Cell Plan

Typical cell phone plans require a two-year service agreement. During that time, customers cannot cancel or greatly modify their plan without having to pay a fee. A no-contract plan gives users similar options for purchasing and using a cell phone, but without the service agreement. Typically, with a no-contract plan, the user is required to pay full-price for the purchase of a cell phone and may pay slightly higher usage rates.

Five Providers Offering No-Contract Plans

Most major wireless providers offer prepaid phone plans as an alternative to service agreements that require contracts. In general, most no-contract plans are prepaid rather than postpaid, like a conventional monthly plan. With a prepaid plan, a user pays for cell phone text, data, and minutes up front. These plans can be charged monthly to a credit or debit card or paid for in the store. A few providers offer prepaid cards. With this type of payment plan, the user loads money on to the card and usage fees are subtracted on an as-needed basis. Typically, these pay-as-you-go plans have a higher cost for minutes and data than prepaid monthly plans.

Cell phone plans change frequently, so it is best to check with your carrier of choice for the most up to date information. The information listed below is accurate as of March 2013.

T-Mobile

The T-Mobile Monthly4G plans require no annual contract. These plans all contain talk, text and data with unlimited usage. The cheapest is $50 per month, including the first 100MB of data at up to 4G speeds, falling back to lower speeds when that limit is reached. The $60 and $70 plans increase that allotment to 2GB and unlimited, respectively. Alternately, T-Mobile also has prepaid plan options that are on a per-day or pay-as-you-go basis.

Boost Mobile

Boost Mobile's prepaid phone offerings do not require a contract. Three types of plans are available through Boost Mobile. The monthly no-contract cell phone plan starts at $50 per month, providing unlimited talk, text, web, email and 411 service. Monthly payments can be reduced to as little as $35 with the company's Shrinking Payments system; for every six on-time payments, Boost will lower your monthly bill by $, up to a maximum of $15 off the full rate. Boost also has daily and per-minute plans available.

Straight Talk

Operated by TracFone Wireless, Straight Talk is available through Walmart stores across the country. Straight Talk works with T-Mobile and compatible unlocked phones, providing a main monthly plan of $45 for unlimited data, talk and text. There is also a $60 unlimited plan that includes international calling and messages, as well as a $30 plan for 1000 minutes, 1000 messages and 30MB of data.

NET10 Wireless

Also offering no-contract plans and operating under the TracFone umbrella, NET10 Wireless has pay-as-you-go plans starting at $20 for 200 minutes, as well as 30-day monthly plans starting at $15 for 200 minutes. The unlimited talk, text and data plan is $45 on the auto-refill system.

Virgin Mobile

Virgin Mobile USA specializes in no-contract plans. The monthly "Beyond Talk" plans have unlimited data and messaging as standard features. They start at $35 a month for 300 anytime minutes, going up to $55 for unlimited minutes. For users who don't have high data needs, the company's payLo plans may be more appropriate and less expensive. The $20 plan includes 400 minutes, with text messages charged at 15 cents each and web access charged at $1.50 per MB. The $30 plan includes 1500 minutes, 1500 texts and 30MB of web, while the $40 plan includes unlimited minutes, unlimited texts, and 50MB of web access.

Advantages and Disadvantages

Benefits

Having a cell phone without having to sign a contract can be beneficial for some users.

  • Freedom to switch carriers: When you are not locked in to a service agreement, you have the option of switching to a different cell phone provider at any time. This would allow you to take advantage of special promotions and rate changes offered by cell phone carriers.
  • Ability to cancel: With a no-contract plan, you have the ability to cancel your service at any time without having to pay a cancellation fee. A wireless plan with a service agreement typically carries a lofty fee for early cancellations.

Drawbacks

There are also disadvantages to think about when choosing these types of cell phone plans.

  • Missing out on special promotions: People using a no-contract plan may not be eligible for the promotions offered to wireless customers on a service agreement. For example, you will likely have to pay full price for the mobile phone if you do not sign a contract, effectively skipping the promotional discount that comes standard with a service agreement.
  • Higher equipment costs: With no-contract service, handsets typically won't be discounted, so the up-front equipment cost can be higher than if you were signing a contract. That's why investing in a quality unlocked phone may be a good idea if you go this route.

Flexible Solution

No-contract plans can help keep costs under control and provide great flexibility. For people who don't want to be tied down to a specific plan with a specific provider for a minimum of two years, these plans can be a terrific option. They can also make mobile phones much more approachable by users who may have bad credit or no credit rating.

No-Contract Cell Phone Plans