How do no contract cell phones work?

Answer 1

“No contract cell phones” (also known as pre-paid phones) have been around for quite awhile. They don’t involve agreeing to a contract that essentially lasts for multiple years, and the consumer can pay to use the phone whenever he or she would like. The way that it works is the consumer pays for minutes beforehand, and after purchasing them, they are then credited to his/her cell phone account. For example, if a person buys 100 minutes, after the purchase is made, the minutes are credited to the person’s account and he/she can use those minutes whenever they’d like. After the minutes have been used without adding anymore, the phone will simply not function on the network (AT&T, Verizon, etc.).

Normal, traditional cell phone plans are usually loaded with fees and billed to the customer at the end of the month. No contract cell phones usually only come with an activation fee. The only other expenses for the prepaid phone would be purchasing minutes for the phone. More people also feel more comfortable with using no contract cell phones because they feel less worrisome about discontinuing service. Usually discontinuing service with a traditional cell phone plan would mean termination fees, unpaid bills, etc.

These types of cell phone plans work best for people that have bad credit history, have a hard time committing to anything financially, don’t talk on the phone much, etc. Some people may find that having a prepaid phone and not a plan saves them loads of money because they don’t spend a whole lot of time talking or texting on their cell phones.

The only downside to no contract cell phones is the fact that the minutes usually do not “roll over.” This simply means that if you purchased 200 minutes to use during the month of June and by the end of the month you still have 50 minutes, you essentially lose those 50 minutes. On the 1st of July, you won’t have those 50 minutes anymore. Some people might find this a little aggravating as over-estimating the amount of minutes you’ll lose could cost you lots of money.

Some people choose to use prepaid plans that simply charge to a credit or debit card every time the phone is used. If a person with this type of prepaid plan talks on the phone for 10 minutes, their credit card is immediately charged when they end the phone call. Of course, there are good and bad reasons to use no contract cell phones, but they can have their advantages in some situations.

Answer 2

No cell phone contract phones typcially cost more out of pocket when you first begin. There aren't any deposits that you have to worry about so that is a plus. You can find these cell phones at any store that sells cell phones, like Wal-Mart, RadioShack and even Target.

Answer 3

Pay as you go phones- you buy the phone, then how ever many minutes you want. You keep buying minutes for as long as you need them.