Should You Get a Contract or No-Contract Cell Phone?

Contract Smartphone

My husband and I have asked ourselves numerous times if we should get a contract or no-contract cell phone. We have a concern about signing a contract that obligates us to pay someone for two years. We feel that no job is secure and therefore signing such a contract would be presuming upon the future.

Do not boast about tomorrow, for you do not know what a day may bring. – Proverbs 27:1 (NIV)

For this reason, every time the question comes up, we choose to keep our no-contract cell phone plans. But that is not the only reason. We have found that, for our situation, the no-contract phones are the most economical. Let me show you how.

The Cost of No-Contract Cell Phone Plans

We have four adults in our household that use cell phones. That is important, because you might think that a contracted “family plan” would be the most economical way to go. However, we all require different options. My husband needs unlimited talk minutes. I do not require unlimited talk minutes, but because I use my phone for business, I do use close to 1000 minutes/month. My son, on the other hand, rarely talks on his phone; he needs unlimited texting. And my daughter rarely uses a third of the minutes/texts that she pays for.

So what does this cost us? If you total all of our separate plans (through Straight Talk, Virgin Mobile, and AT&T), we spend $125 per month to meet our needs.

Now, if we take our requirements and try to get a contracted service, how would that look? In our area, Verizon and Sprint are the major players. (We live in a rural area between two mountain ranges so good coverage is hard to come by.)

The Cost of Contract Cell Phone Plans

Verizon has a new system called Share Everything. Each phone is given unlimited talk and text, and then you pay a monthly charge for a shared amount of data. Using this option, we would incur a monthly charge of $30/phone, plus $50 to share 1 GB of data. I know that 1 GB of data doesn’t sound like much but we do not have Smartphones and only my daughter and I use our phones for email, so I think we can get away with that. With this plan, we would pay $170/month and would be required to sign a two-year contract.

And what about Sprint? It’s still in the Dark Ages of “anytime” minutes vs. “night and weekend” calling. I’m sorry; I can’t be bothered with checking the clock to make sure I’m calling at the most affordable time.

No-Contract Smartphones

“But,” you say, “You don’t have Smartphones. Those no-contract companies have crummy phones. I really need my Smartphone and the service to match.”

“On the contrary,” I reply. Virgin Mobile had one of PC Magazine’s Editor Choice phones on sale Thanksgiving weekend for $149. The HTC EVO V 4G runs on the 3G/4G WiMAX network with the Android 4.0 platform. It offers 3D imaging, a 4.3” touchscreen, and can be used as a mobile hotspot. Virgin Mobile (run on the Sprint network) also offers the iPhone 4 and 4S, Samsung Galaxies, and others. And no matter which phone you choose, Virgin Mobile only charges $55/month for unlimited everything. Comparable contract plans would be $100 with Verizon and $109.99 with Sprint—if your calls stay in-network.

So should you get a contract or no-contract cell phone? Do you value cutting your expenses or getting ultra-premium service? The choice is up to you, but for my family, we are happy with what we have. And as far as upgrading goes, I have my eye on that HTC EVO V.

What are your thoughts on contract vs. no-contract cell phone options? Leave a comment and let us know!

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  1. rich

    I agree as well. I switched from verizon to t-mobiles no conract month to month plan. I have unliminted everthing now and my bill consistantly stays at 53 dollars a month. If u do the math, you will actually find that the difference in the monthly plans is so much that over the period of that 2 year contract that u paid way over the price of that brand new phone thay gave u. You would be much better off purchasing a new phone and getting the no contract service. Personally I just researched phones for about 3 weeks to find out which one fits all my needs and is most econimical. I ended up buying a never used phone off a man that got it for free then switched to another provider that didn’t support his brandnew phone. I only spent 200 dollars for a 450 dollar phone. There are deals like that all over u just have to be patient. Even if you need an immediate phone you can purchase one off ebay while you are waiting for that perfect deal to show up. Once you find the phone you desire sell the cheaper phone back on ebay for the same price you bought or maybe even make an extra 10 or so dollars.

    • Carol J. Alexander

      Thanks for sharing, Rich. A little shopping and a lot of patience will always pay off. Also, buying according to your needs and not something just because it’s the latest and greatest will save you a bundle.

    • Rich

      Your welcome. I don’t know if it was because I read your blog or just happen to happen but yesterday it was time to pay my tmobile and I decided to cut down on the price as well. This is what I did:

      Cut my Tmobile plan from Unlimited minutes, Unlimited text, Unlimited Web (4g up to 100mb) for 50 dollars a month. No extra normal cell service or tax fees.

      New plan Tmobile 100 minutes a month, Unlimited text, Unlimited Web( 4G up to 5GB) for 30 dollars a month.

      Saved 20 extra dollars on my phone bill now and gained tons of 4G speed compared to my old plan. Sure I bumped my minutes down to 100 a month but not really. Everywhere I have web I also have talk time. All I did was download a free VOIP app on my android phone and so far it works stupendously great. Love it. Feels great saving almost half your bill each month. Wish I would have done this 6 months ago. If the free voip doesn’t work out to well I will pay 2.99 for Skype or there is also some cheaper services out there as well.

      Thanks for blogging this article, I am sure it inspired me to go cheaper. LOL 🙂

    • Carol J. Alexander

      Great idea, Rich. Thanks for sharing it. I believe you cannot do that with other services, though, because to have the Smart Phone that supports apps you are required to carry the unlimited everything plan. T-Mobile must have more options that I will need to check out.

  2. Andrew

    I don’t know where you got your information but I have had sprint for 2 and 1/2 years and its unlimited minutes except for landline calls. You have a limited number of minutes for landlines. Unlimited data and Unlimited mobile to mobile calling for 45 a month with family plan. All 5 of us have the newest smart phones and use the data to the fullest extent. Please rephrase your comment about: “And what about Sprint? It’s still in the Dark Ages of “anytime” minutes vs. “night and weekend” calling.”

  3. Joseph

    Have you given a look? They have some of the latest handsets out there (LG Optimus G, Samsung S3, Samsung Galaxy Note 2, HTC Evo 4G LTE) as well as allowing you to bring your own device over from Sprint. If you’re a light user of voice/text/data, you’ll end up saving even when compared to Virgin Mobile. Voice is on the Sprint network, with free roaming on Verizon. Data is on Sprint’s network (including its WiMAX and LTE networks where available). They even refund you if your usage falls below your preset levels. While the unsubsidized price of the handsets is a bit hard to swallow initially, my wife and I save in the long run. Since joining Ting in March 2012, our average bill has been $34/month for two smartphones (shared minutes/text/data), including taxes and fees. Customer service is top notch as well.

    • Carol J. Alexander

      Well, Joseph, I just did. I had never heard of Ting before so thanks for pointing it out. It runs on the Sprint network as does Virgin Mobile. I currently used Straighttalk’s All You Need Plan which gives 1000 voice minutes, 1000 texts, and 30 mg of data for $30. The same coverage on Ting comes to $32. I am seriously considering switching to Virgin Mobile’s Beyond Talk Unlimited Everything Plan for $35 and purchasing a Android powered phone with a regular price of $249. The same phone from Ting is regularly sells for $519. Unless their credits for light months make up for the difference, I don’t think I’ll be switching to Ting. But that doesn’t mean it’s not the right choice for some. Thanks for sharing.

    • Joseph

      Thanks for the response, Carol. I should mention that the VM’s HTC EVO V 4G (based on the 2011 HTC EVO 3D) is a year older than Ting’s HTC EVO 4G LTE (based on the 2012 HTC One X) and so they are not directly comparable (I know, all this rebranding is confusing!). VM tends to stock last year’s Sprint handsets, while Ting has many of the current year Sprint handsets. So if having the latest handset and not last year’s model matters to you, then Ting has the leg up on VM. Yes, to realize savings from the switch from Virgin Mobile (and other prepaid options) to Ting, we’ve taken advantage of using Google Voice (in tandem with the Talkatone app) and Skype on our iPad and smartphones for free voice calls over WiFi. So we end up only using under 100 minutes of voice between the two of us every month. That makes all the difference. I’ve also started using a hotspot (free, but with a $100 refundable deposit) and the free 500MB/month data allotment to keep our Ting data usage down. Takes a bit of creativity, but lowering our recurring cell phone costs to $17/phone/month has certainly been worth it. That said, we do sometimes miss the luxury of unlimited usage on Virgin Mobile.

    • Carol J. Alexander

      Thanks, Joseph, for the clarifications. I will check out next. Glad to see that with a little creativity you can save even more.

    • Carol J. Alexander

      The downside of living rurally, Joseph. FreedomPop is nowhere within 100 miles of my hometown. Hopefully, other readers will have better luck.

  4. Tom Larsen

    I have also pondered which is the best route to go. Just one note, I don’t think you figured in the cost of the phones themselves, which can be quite a bit higher on the pay as you go plans, as opposed to the contract plans, where the phone cost is amortized over the length of the plan. Just a thought. I enjoy your emails and website.

    • Carol J. Alexander

      Thanks, Tom. Personally, I think the free phones and greatly reduced prices is a gimmick. I think it all starts with the cost of the phones being inflated from the get go. Plus, the no-contract phones go on sale all the time and they are also sold for less on Amazon and Ebay.

  5. Carol J. Alexander

    Thanks for piping in, Andrew. Perhaps it’s different in different parts of the country?? I got my rates from this page: and they just don’t look as favorable as what you have.

    • Andrew

      I just got my wife upgraded with two year extension with sprint yesterday and sprint said this is their nationwide plan. Your info is at least 3 years out if date. Also, signing a contract is not debt. You can cancel your contract whenever you please as long as you follow the contract.

    • Andrew

      Ah, I see what you think you saw as ANY time minutes. If you read further you will realize that any time minutes are the landline minutes I explained earlier. If you call a mobile ANY mobile then you will not be charged minutes. I have not heard of ANY other service out there offering that. No you have pay attention to your minutes for everything. Because you have a limited number of minutes. As you can see I am a bit aggravated at the bad name you gave sprint in this article without reading into the page. I like christianpf but please ask for input from someone who has the service and who actually understands what every service offers. There are benefits and disadvantages to every cell phone plan. YOUR NEXT ARTICLE SHOULD BE ON THIS: Why do you pay twice, thrice and four times for the same service. AT&T for example charges you for calling, texting, data, and let’s say wifi capability. It’s the same technology and it doesn’t cost them any more for you to do these separate things (another reason to like unlimited everything with sprint for 45 dollars.) but they are legally allowed to charge you for using the same technology in FOUR DIFFERENT WAYS. I would like to hear your input on this.

  6. joe

    There are two types of no contract pay as you go. ATT has you buy a minimum $100 worth of time. On the anniversary, your minutes will roll over if you buy another $100 worth. Otherwise, the minutes expire. However, it sure looks like the cost per minute went up from 25 cents to 50 cents a minute. Obviously, I don’t use the phone much.

    Tracfone has you buy minutes for a set price. So, the cost per minute does not go up over time. But these minutes will also expire after a year or so.

    I have two phones in the family and presently have both plans. For my limited usage, the Tracfone seems to be the better deal.

    • joe

      I went to Walmart in Hodgkikns, IL (near Chicago 9/2012) where I purchased the Tracfone as described above. For $140, I got the flip phone that fits in my pocket that has a camera, etc. and 800 minutes that expire in 18 months. I recognize the phone as being the hot model that came out before the smart phones. I already used up 400 minutes in the first month talking to tech support about the computer. But who cares. More minutes than I will ever use.

      I would not have purchased so many minutes. I did not realize that with the purchase of the phone, I would get 400 minutes. Even the clerk was surprised when my 400 minute card turned into 800 minutes.

    • Carol J. Alexander

      Thanks for sharing, Joe. Not everyone needs a lot of minutes. That’s why I like the choices the different companies have. My son rarely “talks” on the phone, but uses A LOT of texts. So we went with the company that had the best plan for that type of usage–which just happened to be ATT.

  7. Mike

    Its about money right? ! 1st a conrtract is debt, unless you have all the payments up front say in an account, God says no debt, He dosn’t say maybe or if on this. Now as for communications we use SKYPE, no contracts and its FREE! Skype has mobile apps so no need for a cell. And some of the most fun I’ve ever had was FIRING my land line phone company and there majority partner the govt! On a $30 monthly phone bill ( basic service, no long distance ) only $13 was for the phone the resrt was govt! Anywhere I can get govt OUT of my pocket I go out of my way to cut. I do all my bill paying through my Credit Union just to NOT BUY STAMPS. USPS should have been auctioned off in pieces the day e-mail was invented! LOL

    • Andrew

      It’s a bold statement to call a contract, debt. A contract is our version of a verbal agreement put on paper. There’s a contract involved when someone helps you build your house or when you finance your home or when you open a business in the U.S. etc. etc. What the contract does is state what either party will be obligated to do in different circumstances. If you stop paying then yes you have debt. If you choose to end the contract which you have the right to do in most contracts then you may have to pay a penalty but that is all outlined in a contract. You also have a contract with the United States Governement. It states that you will pay taxes on all your income. You have a contract with them that states at age 18 you will sign up for selective service agreeing to be called up should the draft ever be reinstated. There are contracts in the bible. A contract is not debt. It is a verbal agreement put on paper for reference and proof.

    • Mike

      I NEVER said ALL contracts are debt. When yoh sign a contract for phone service are you not commiting to pay money? Or is it some thing else? Say the phone service provider is going to pay you? Get a grip bud. If you wish to waste your money go ahead but don’t mis guide others, Christian. Oh what kind of money taking contracts are you selling? See its easy to find the motive, always follow the money.

    • Andrew

      You’re right, you never said all contracts. There are better ways to spend your money than to count minutes and kilobytes of data. My point is that a contract, whether it states that you will pay for two years or you will pay for a house, is a tool to prove that money is owed, like debt, but there are choices in a contract. No one signs a contract that binds them for 2 years or 30 years. All contracts are negotiated and many contracts are now followed through for half or less of the original term. The phone contract is one way to get service and to get a discounted phone when you say you will pay for two years. If you decide not to finish the 2 years than you pay a cancellation fee which means you have now paid for the phone in full. This is not a debt. If I owe a debt then I must pay in full until that debt is finished. Don’t assume I am a Christian or that being a Christian and having an opinion is wrong.

  8. Michael

    Carol- great article! As much as I would love to have an iPhone5, the thought of paying $2K over two years makes me blanch. I am currently in the process of switching over to PagePlus, an MVNO using Verizon’s network. They have plans starting at $12/month! You can use any Verizon branded phone except 4G models. The data is limited to 3G only, but for $30/month you can get TnT: 1200min/3000texts/250MB data. Sure there are limits, but isn’t that the point of having a budget?

    • Michael

      Don’t want to leave out that PagePlus is prepaid, no contract!

    • Carol J. Alexander

      Thanks for sharing, Michael. Another option I had never heard of before! With PagePlus I can get more minutes and text messages than I get on my current StraightTalk plan for the same price. Although I very rarely use all of what I have as it is. However, if I had a Smart phone, as I’m considering purchasing, I would have to pay $10 more per month with PagePlus than the comparable plan I’m considering with Virgin Mobile. Plus, why would they not have more phone options? I know you said you could use any Verizon branded phones, but I couldn’t find that mentioned on the site. If I were to consider this option, I would want to call and speak with a representative to verify that the “one of the largest networks in the United States” that they run on is in fact Verizon.

    • Michael


      Go to and their forum, Kitty is PPs #1 online dealer. The community there is very helpful and I learned a lot from them. I am dropping TMobile. What I did was buy a new Droid Incredible (Verizon) and activating it through kittywireless was extremely easy. And porting your number is free!

  9. Josh @ Live Well Simply

    I have a contract currently, but the way of the future is no-contract. When my 2 year ATT contract runs out, I’ll be switching.

    • Carol J. Alexander

      Hopefully, Josh, we’ve given you a lot of information to get going on comparing plans. Thanks for sharing.

  10. joe

    I can’t keep track of this new technology. I have DSL that requires a land line. My total bill for land line and DSL is less than $50. ($33 for DSL from ATT+ calls (under a dollar) + the rest is tax and fees. My cell phone is pay as you go, which is yet another discussion. Any ideas on trimming the land line phone bill even more?

    • Carol J. Alexander

      Thanks for asking, Joe. I am currently considering switching my cell phone from Straighttalk to Virgin Mobile because with VM I can get an Android powered phone that serves as a mobile hotspot. That way, I can use it to replace my DSL. If we make this switch, and kill our landline, it could save us $25/month. What’s stopping me? Only wondering if the VM plan includes enough data for me as I work from home; and between my work and the family, I’m not sure if the data limits would be sufficient. One call to my phone company and I’ll have an answer. I’ll keep ya’ posted. 😉

  11. Carol J. Alexander

    Thanks, Takiyah. I’ve done a lot of comparison shopping recently, and even though I still believe the no-contract phone service is the way to go, I’m considering changing my carrier after being with them for several years because they are all getting on the wagon and it’s a lot more competitive than it used to be.

    • Carol J. Alexander

      Amen, Takiyah. Another area of controversy is insurance. Years ago when my children were little, I found myself constantly calling my health insurance agency to dispute charges. The customer service rep once told me that if people took a little more care in reading their bills, they could save themselves a lot of money.

  12. Nate Steuer

    I agree wtih Andrew. I have Sprint and I get 100% unlimited everything. They have the best plan on the market hands down and it’s nationwide…

    • Andrew

      Thank you. Unfortunately, on the website the Author was using, it doesn’t clearly state that they are land line minutes only. After looking at the page I could see the confusion.

  13. Carol J. Alexander

    Loyal Readers,

    Wow, I never expected such a vehement defense for one’s cell phone carrier. I’m sure Sprint appreciates the loyalty. Makes we wonder, Andrew, who your employer is. 🙂

    I did finally have the time to call Sprint and get a human to explain what I was reading on their website. But before I say any more about Sprint, I want to reiterate that different plans/carriers will be right for different people—according to their needs, usage, and location.

    Andrew was correct on one point. Sprint only charges minutes when you call a landline. That is an advantage in savings, if a lot of your calls are to other cell phones—no matter who the carrier is. However, as I read on the website, if you are calling a landline, you do need to be aware of what time of the day it is as to when you are charged.

    I am at a loss, however, to understand how Andrew gets his unlimited everything for $45/month. It is obvious, and the person at the Sprint store explained to me, that the unlimited everything plan for an individual is $109.99/month. For a family of five, as Andrew has, it is $209.98 for the first two phones, and $99.99/line for the additional three smart phones. That comes to $509.95/month and that divided by five phones is $101.99 each. Perhaps, Andrew, you have been with Sprint long enough that your rates are lower than someone just signing on? I’m not sure. But my information is not three years out of date; it is per the representative that I spoke with today.

    My purpose in writing this article is not to give anyone a bad name. Like I said, different plans/carriers will be right for different people. I merely wanted to compare contract phone service with non-contract phone service. If a person doesn’t care about having the latest and greatest phone, I still hold to the fact that a non-contract carrier is the more economical way to go. Who can argue with $45-$55/month unlimited everything from Straighttalk or Virgin Mobile that operate on Verizon or Sprint towers? Not me. And I will continue to use one or the other with the satisfaction of knowing that they have me covered without my signing a document that presumes upon the future.

    My next post will be a comparison of different non-contract carriers. So, if you have a favorite you’d like to see covered, let me know who they are.

    All in good faith,

    • Andrew

      I appreciate your research into sprint. I can compromise and say sprint is not for everyone. I don’t pay attention to the landlines and I have never gone over. You don’t pay 109 per phone… It’s 79.99 for unlimited everything and 30.00 for every phone after. With gov taxes and fees its roughly 45 or less per phone for 5 ppl

  14. Andrew

    Btw lol my employer is USAF and I would like to see if Ting would be s good switch for me. I can use sprint phones on it.

  15. Karen Lange

    Haven’t given this much thought (as far as the contract goes) so this is something to think about. We currently have a family plan with At&T with my husband, daughter, and me, and last I checked, we have a pretty good deal. We have a plan grandfathered from years ago that has unlimited anytime minutes, and the add ons for text and my daughter’s data package are reasonable. I like to keep an eye on prices, so thanks for the reminder and food for thought.

    • Carol J. Alexander

      You’re welcome, Karen. I make it a practice to regularly compare things like phone services and insurances to make sure I’m getting the best deal for my money.

  16. Donna

    Thanks for a very informative article Carol, as well as the informative comments everyone. Wanted to go along with Michael in recomending PagePlus. I’m giving my daughter a cell phone upgrade for Christmas. She ask for touchscreen and data time to check her FB. I come across pageplus and the MVNO. I can get her unlimited TnT and small amount of data time for less than Straight Talk, and the phone itself was only $149 and a much better quality phone than the comparative Straight Talk phone. The major issue for us, is service in our rural area. It has to run on Verizon network and Page plus does! My Husband and I have our 2 phones on contract with verzion. Because we have upgraded the phones over the years our contract for each phone cancel out at different times. And, we have a 3g hotspot for and extra $50 a month. our Bill runs $137 a month for both phones, hotspot and 4 gig (thinks that’s what they call it) of data time. We have never exceeded our data except for the first month my daughter received her Kindle fire. We had to put a limit on videos 🙂 . So Many choices out there.