Last June, I switched from a prepaid T-Mobile cell phone + Vonage combination to a two-year contract with another cell phone carrier. I made this decision because I had decided I wanted a smartphone, but I was tired of the poor quality of the ones that were reasonably priced with a prepaid account.
With T-Mobile, I was spending:
- $36.69 on Vonage (I paid yearly to save somewhat)
- $32.85 including taxes on average per month adding to my pre-paid account
- $69.54 total
Then I spent $220 including taxes on a new phone and started spending $85/month, an increase of $15.46. Multiply that over the 24 months of my contract and that’s $371.04, ignoring the cost of the phone.
I don’t use much data each month – most of my usage is really while on wi-fi and it’s nice to have access to maps while I’m outside of the house. I have been averaging about 450 text messages per month, about 350 MB of data, and about 800 minutes.
If I switch back to T-Mobile pre-paid when my contract is up, I’d either go with either the $50 Unlimited Talk, Text & Web (reasonable speeds for the first 100 MB) or the $60 (reasonable speeds for the first 2 GB) plan.
If I switch back to T-Mobile pre-paid when my contract is up, I have the following options as of right now:
- $30 – 1500 minutes or messages with 30 MB of data (the plan that I was on before)
- $30 – Unlimited Web & Text with 100 Minutes Talk (first 5 GB at up to 4G speeds)
- $50 – Unlimited Talk, Text & Web (first 100 MB at up to 4G speeds)
- $60 – Unlimited Talk, Text & Web (first 2 GB at up to 4G speeds)
- $70 – Unlimited Talk, Text & Web (first 5 GB at up to 4G speeds)
- Plan #1 would most likely be a sufficient number of minutes and text messages, but it’s a bit low on data and could be expensive on the overage.
- Plan #5 is definitely more data than I need.
- Plan #2 doesn’t have enough minutes and the overage would be really expensive.
- Plan #3 is probably a safe bet in terms of not having much overage and if I find that I repeatedly want to use more data than 100 MB, I could switch back and forth monthly between the $50 and $60 plans since I’m not locked into a contract.
If I alternate between plans #3 and #4, I would spend $595 less over the course of the subsequent 24 months than I would have if I was to re-sign my contract. If you add in the fact that many phones are $100-200 plus taxes even if you sign a contract, that’s $700-800 I have to work with.
If you wait until a nice Android phone has been out for a few months, you can usually get it unlocked for much cheaper than if you’d bought it right away. For example, the Galaxy Nexus is now only $349 plus taxes unlocked through Google.
Back when I signed my contract last summer, I was looking at two phones, one that cost $100 off-contract and one that cost $200 on-contract. I was really stupid and chose the latter and now I’m stuck with it for almost another year. The phone was so not worth the extra money and I’m really regretting it now.
Readers, what do you do for a cell phone? Are you stuck in a contract like I am?