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3 On Your Side: Save Money With Prepaid Smartphones

jim-donovan-web Jim Donovan
Jim Donovan is a 13-time Emmy Award-winning consumer reporter w...
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By Jim Donovan

PHILADELPHIA (CBS) - Love your smartphone, but hate the bill? You may want to consider signing up for prepaid wireless! As 3-On Your Side Consumer Reporter Jim Donovan finds, even the most popular smartphones are available for prepaid users. So it may be worth considering if you’d like to shave some bucks on your cell plan.

Saving money is important when you have six kids and that’s why Tiffany Wong switched to a prepaid wireless smartphone. She says, “If I can get the same service for less than half the money, I’m going for it.” Tiffany got a prepaid droid which includes: unlimited texting, internet and phone calls for forty-dollars a month.

Her old “contract based carrier” bill was about one hundred dollars a month for the same services and benefits. The sixty dollars a month savings was such a good deal, she got her son Ryan a prepaid smartphone too, which he uses to surf the web. He says, “Since there’s eight people in my family, someone’s almost always using the computer.”

With prepaid mobile you don’t make any contract commitments to one carrier, and you pay a set flat monthly fee upfront. That eliminates any surprise overage charges, which may come in handy with tweens. According to John Breyault with the National Consumers League, “You wouldn’t want to give them a high end smartphone with an expensive post paid plan where they might get overages on and blow out your family budget.”

The latest news in the prepaid market involves the iPhone. Virgin Mobile and Leap-Cricket are now offering prepaid iPhone service.

While T-Mobile says if you currently have an iPhone, ask your carrier to unlock it, bring it to their store, they’ll pop in a new sim card and you can get inexpensive prepaid service. Larry Petrone of T-Mobile says “often those customers find even with a penalty to cancel a contract they’re able to save money by switching.”

Some drawbacks to having contract-free cell service? If you want a smartphone, you’ll pay the entire retail cost of the device, which can be more than five hundred dollars in some cases. Also very few prepaid family plans are available, so you really need to figure out the savings for your household. According to Breyault, “You have to incorporate the higher upfront cost of the device itself versus the cost of keeping, adding another line to your family plan.”

By the way, right now the prepaid market is being driven primarily by younger, less affluent users, who are “highly mobile” and “live” on their smartphones.

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