First let me define a contract phone vs a pay as you go Cell Phones.

Contract Phone

With a contract phone you will have to sign a one or two year contract to pay a certain amount each month.  This is also known as a Post pay account because you get a bill at the end of the month.  You will have the option of getting a free phone or paying more and getting a fancier phone.


Pay as you go Phone

With a Pay as you go phone you will buy a phone and then add minutes and service time as you need them.  You have to pay for minutes and add them to the phone before using the phone.   You can only use the minutes that are on the phone.  If you use all the minutes on the phone, it will quit working.  A Pay as You go Phone is also called a Prepay, PAYG, or Prepaid cell phone.

Tracfone Motorola W370, Moto W376, W375

Advantages to Pay as you go Cell Phones

  1. No penalty charge if you suspend service.
  2. No surprise huge bills.
  3. No monthly payment (you will have to regularly add service time to your phone)
  4. If you buy more minutes they are usually cheaper not more expensive
  5. Most do not have an activation fee
  6. Minutes roll over on most plans if you keep your service active

Advantages to Contract Phones

  1. Usually you will have your choice of several different “free” phones if you sign the contract.
  2. Usually you will have unlimited calling to other people on the same network.
  3. You will have Smart phones or really fancy new phones available

There are several big players in the Contract phone business and it will depend on where you live as to who is the dominant vendor.  Nationally Verizon, AT&T, Sprint, T-mobile are the larger players.

The Pay as you go companies are smaller but growing faster.  Tracfone, Net 10, Virgin Mobile, Cricket, and many other smaller compainies.

Pay per Minute
The most common model for prepaid is the pay per minute model.

Pay per Day
The other model is a pay per day unlimited calling.  With these from Verizon, T-Mobile, At&t you will be able after paying a fee for the day you will be able to make unlimted calls to other users on that particular network.


Biggest Players in Prepaid Cell Phones
Tracfone is by far the largest Prepaid phone company with over twelve million customers.  T-Mobile has a large prepaid user base.  Virgin Mobile, Cricket, Boost Mobile,Metro PCS, are just a few.  Net10 is the sister company of Tracfone, they are growing rapidly and offer a few different phones and a different payment plan.

The other major Cell companies like AT&T,  Verizon, Alltel, sell prepaid but they really want to sell contract phones.  Sprint does not sell prepaid phones but Virgin Mobile runs on their network

How Tracfone Works
How Net10 works
How Verizon Prepaid Works
How the Net 10 Unlimited Plan works

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