Advantages and Disadvantages of Skipping Cell Phone Contracts

By Malcolm Aquino on September 9, 2013

Paying the cell phone bill is not something that a lot of college students are currently worried about, with 60% of them still on their parents’ plan. However, for those are or are slowly becoming financially independent, cell phone plans are a big undertaking for people who are facing a climbing student loan debt. In the past few years, small start ups like Boost and Cricket and big wireless companies alike have introduced prepaid cell phone plans for those who don’t want to be tied down with contracts. Prepaid plans are still a new trend that offer many benefits, but like any new thing, there are always going to be drawbacks.


There’s more variety in plans

A phone without data is a useless phone in today’s age of instant information. Texting has become the most popular way for college students to communicate. Metro PCS, one of the first prepaid contract companies, offers unlimited talk/text/data plans starting for for $40 a month. Boost Mobile offers a shrinking unlimited plan that starts at $50 and for every month you pay, five dollars is taken off, making it possible for the plan to only cost $35 per month. However, Verizon and AT&T don’t offer unlimited data plans and all of the big cell phone companies, with the exception of T-Mobile, charge for texting plans and data plans, in addition to minutes. In addition to this, you have to agree to a two year contract that you can’t cancel unless you pay a hefty fee, which brings me to the next advantage

No contractual obligations

As stated above, prepaid plans don’t carry any contracts with them. You simply pay the monthly fee and you can cancel at any time. It works just like a Netflix subscription. If you have a contract with a cell provider that you absolutely hate, cancellation fees costs start in the $200 dollar range, which is a lot for broke college students.


Phones cost more

One of the advantages of a cell phone contract is the big discount on new phones. With prepaid phones, you have to buy the phone you want before you activate your contract. If you want an iPhone 5 without a contract, it’ll cost you $650 if you buy it directly from Apple. For a Galaxy S4, it’s $604. Of course, there are alternatives to buying a phone straight from the manufacturer, such as buying unlock phones off of Craigslist or other online marketplaces. However, the obvious risks of buying second hand things on the internet apply. Luckily, some prepaid companies, like Cricket offer discounts on phones if you buy them directly from their site.

Lack of coverage

The biggest advantage of getting a cell phone contract is that you will have coverage almost anywhere you go. Companies like Metro PCS don’t have the bandwidth in some areas so if you happen to be unlucky and live in an low coverage area, you are out of luck until they improve their coverage. Of course you can always cancel your plan and switch to someone who has better coverage.

You can’t keep your number

If you cancel your plan, there are few companies that offer you to keep your original number, so that becomes quite a challenge when you want to keep in contact with all your friends, family, and everybody else who has your old number.

Prepaid plans are growing in popularity, and with good reason. They offer unparalleled flexibility and personalization and are a much cheaper alternative to having a cell phone contract. However, nothing in life is perfect and there are a few issues that someone has to consider before they break away from the cell phone contracts.

Photo by GoodNCrazy on

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