Having a monthly cell phone bill can take a big bite out of your monthly budget, especially if your phone consumes large amounts of data. When cell service providers switched from unlimited data plans to capped data, many consumers started looking for alternatives.
Prepaid cell phones can save you a bundle — if you know what to look for.
Here are four steps to take when switching to a prepaid cell phone:
1. Drop the Data
The first thing to consider is if you really need data on your cell phone. If you have a tablet or e-reader, you can drop your cell phone data plan and use those to check email on the go. You can also opt for a data block on your phone, only using your home WiFi network to access apps and email.
Even a contract cell phone bill will drop drastically without data charges. If you’re sticking with a carrier plan, ask about putting a data block on your line to keep from accidentally incurring costly pay-as-you-go data charges.
2. Check Your Coverage
Before you select a prepaid phone, you’ll need to determine which band has coverage in your area: GSM or CDMA. For example, if you’re currently with Verizon and have decent signal strength, you’ll want to go with a CDMA phone. Alternatively, AT&T runs on a GSM network.
Each prepaid provider has a coverage map and, usually, an interactive feature on their website that allows you to check coverage at your address. It’s also a good idea to call the company directly to verify coverage before you buy — especially if signal strength looks spotty in your area.
3. Research the Plans
Prepaid cell phone terminology can be a bit confusing. Many plans advertise “unlimited” talk or data, but actually include a preset data cap per month. After you exceed this preset limit, your data speeds drops drastically, throwing your service back to the stone ages of dial-up connection sluggishness.
Before you choose a plan, you’ll need to determine which plans are truly unlimited, as well as how much data you consume on a monthly basis. You can keep your current cell phone number, and many companies will waive activation fees if you ask. You also might want to invest in cell phone insurance to cover damage to your phone.
If you’re switching to a no-contract carrier, you should plan to purchase a new phone. Not all phones can be unlocked, and even if you use a professional unlocking service, you could still end up with a very expensive, non-functioning paperweight of a phone.
4. Choose a Carrier
You can find great deals on prepaid phones by taking advantage of clearance models, special coupons, and sales. But if you choose your preferred carrier and wait patiently for a good deal, you can often get a phone with the features you want at a good price. Popular prepaid carriers are: Boost Mobile, Cricket Wireless, MetroPCS, U.S. Cellular, and Virgin Mobile.
Virgin Mobile has the best deal for data consumers, with unlimited talk, messaging, and data for a mere $55 per month. They also offer deals on no-contract iPhones that make them an attractive choice for many consumers. But, Virgin Mobile doesn’t have signal coverage in all parts of the U.S., so be sure to check coverage areas before you buy.
Boost Mobile is one of the overall best-rated prepaid service providers. If you’re interested in saving money on your initial investment, they offer a good selection of pre-owned phones on their website. For your billing, you can pay by the day or the month. They offer a cool “shrinking payments” discount of $5 off your monthly service when you make regular payments for six months in a row. You can also save more if you set up automatic payments. Lastly, they offer a nice referral program that earns you $25 for every person you refer to the service.
For a comparison of prepaid carriers, check out this PC Magazine post on prepaid cell phone features and ratings.
Do you use a prepaid cell phone? Why or why not?
This article originally appeared on MoneyNing.com. Let us know what you think (or read what others thought) here.
Related posts:
Are You Really Saving Money with a Cell Phone Contract?
Mobile Phones: What’s Best For You?
What to Do When Your Cell Phone Contract Is Up