Pay-As-You-Go vs. Contract Plans

AT&T

At some point, cell phone users face the question of which is the better route to take between a pay-as-you-go option and a contract option for their cell phone. Even after selecting one over the other it may leave you wondering if you made the right choice and if you should make the switch.

Many people are not aware of what the details are of both options. Once you do there is a good chance you will know what the better solution is for your situation.

If you are in the market for getting a new cell phone, or you are ready to renew the terms of your current contract, take a few minutes to consider the options. Here are some details about pay-as-you-go vs. contract plans that will help you make a solid decision:

Pay-As-You-Go Plans:

With pay-as-you-go options you will avoid the long term dreaded contract. Many people find that this is the biggest benefit. They don’t have to worry about sticking with one provider for a couple of years. There are also no termination fees to worry about, should you decide you want to move on or make changes.

Pay-as-you-go plans allow you to purchase the airtime as you need it, adding more within minutes. Because you are not paying for time that you may not use, you could save some money with this route. Ideally, this is a good option for someone who doesn’t use his or her phone often.

Contract Plans:

Most people are familiar with contract plans, which typically keep people with one provider for a two-year period. If you break that contract you will usually have to pay a penalty. This can be a problem for those who have moved or would like to change providers for other reasons.

One of the benefits is that you can usually add multiple lines, for other family members, and save money on their monthly fees. Contracts do not usually offer flexibility in how minutes are used and users may pay a premium if they go over their allotted time for the month.

Some people also lose unused minutes, while others may be able to roll them over into the next month. When people agree to a new contract they may get discounts on their phone, as well as on their monthly contract amount. This type of plan is an ideal option for the person who is going to use a phone regularly and not want to worry about all the minutes and continuously purchasing airtime.

Whether or not you decide to go with a pay-as-you-go plan or a contract one often comes down to how much you use your phone. Those who mainly carry it for emergency purposes, using it for very little else, may find that the pay-as-you-go plan is ideal for them.

On the other hand, someone who talks, texts, and plans to use the phone a lot would probably benefit from the monthly contract package. With either route that you go, be sure to read the terms and understand them before you get signed up.

Last updated July 11, 2017.