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Many customers still associate monthly plans with prepaid billing only. However, this is changing. While plans without contracts once only really catered for users with simple needs and didn't include bells and whistles, more and more smartphones are being offered on monthly plans with postpaid options.
If you're considering a monthly cell phone plan, you'll need to compare the pros and cons and decide if it's the best option for you. Like with phones on a contract, not all monthly plans are the same, and you may find that signing up for a two-year plan may be a better fit for your circumstances after all, once you've crunched some numbers. For consumers who don't feel the urge to own only the newest and shiniest phones, buying a cheaper phone outright and signing up for a month-to-month deal could potentially save them hundreds of dollars a year.
The big plus about a monthly plan is that, of course, you are not locked into a contract. This means that you are free to cancel anytime, usually with 30 days' notice, and switch plans as you feel like it, without suffering any termination fees as you would with a two- or three-year contract.
Depending on your carrier, you may also find you get more value for money than on a contract, particularly if you go with a smaller provider. This is something you'll need to work out by comparing different plans. When you're locked into a contract, you'll usually pay more each month than in a monthly arrangement, because you're adding in the cost of a subsidized phone (which, although advertised as "free", usually isn't).
You'll need to evaluate monthly plans in the same way you would two-year deals and look for the option with the features that benefit you the most. Monthly plans will all highlight certain areas of cell phone use, such as texting or data. The best method is to compare what the features that you'll require cost per month, with and without a contract and between carriers. If you're someone who finds that their typical usage actually fluctuates from month-to-month, a contract is definitely not suited to your needs, and in fact a prepaid or pay-as-you-go option might be worth considering.
Some carriers offer unlimited plans with supposedly no restrictions on calls, texts and data (although a "fair use" policy will apply), but these will certainly be the most expensive. For consumers wanting to pay less, bigger carriers will often offer unlimited calling to other users on their network, or unlimited night and weekend calls with certain plans. Not all plans will offer these features, but a little research and checking the carrier used by frequently called friends and family could end up saving you money each month.
As with all unlimited plans, some may offer extras such as data tethering, while others won't (or will charge you a monthly fee). You'll need to keep an eye on data, as most 'unlimited' data plans give you a certain amount of megabytes or gigabytes at full speed, then slow speeds considerably for the rest of the month.
An interesting point to remember is that according to surveys, no contract customers are supposedly more satisfied overall than customers locked into a contract. Most of this satisfaction can be attributed to more freedom to switch between plans, no worries about cancellation fees and the fact that a lot of customers on monthly plans still have simpler needs than those locked into contracts.
Generally, no contract plans work by allowing customers to buy a phone at full retail price, either online or in store, activate it online and select a no contract plan. The one thing consumers need to be mindful of is that some carriers only allow customers to sign up with phones programmed to their specific network, refusing to accept unlocked phones from other carriers.
The big catch to these types of plans, therefore, is that being free from a contract doesn't necessarily mean you'll be free from the carrier from which you purchased your phone. Unless you want to shell out for a new device, you may find yourself stuck with the network you purchased your phone from.
The point to remember is that it's possible for you to have the features and benefits of a postpaid cell plan without the requisite one- or two-year lock in, and to save money doing so - if you're proactive and prepared to shop around.