What are the Advantages and Disadvantages of Prepaid Cell Phones?

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  • Written By: Diana Bocco
  • Edited By: Bronwyn Harris
  • Last Modified Date: 22 September 2016
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It seems that nowadays, everybody has a cell phone. If you want to join the wave but cannot or don't want to sign a binding contract, prepaid cell phones may be the ideal choice. While under a regular contract you are forced to pay a fixed monthly fee, these phones allow you to pay as you go, so you can control your spending. If you are considering buying one, here is a breakdown of the advantages and disadvantages of this type of phone:


  • The main advantage of prepaid cell phones is the lack of a contract. Because you are not tied to any specific company or monthly rate, you can spend as much or as little as your budget allows. If you don't use your phone much, going prepaid make a lot of sense, as you don't have to pay a fixed amount for minutes that go to waste.

  • Another good advantage is that there is no credit check required to open an account. This is great for teenagers or for those with no credit history.

  • Prepaid cell phones don't require a deposit to open an account, unlike many other plans.

  • They are a great option for parents who want their children to have a cell phone but want to have control over how much they spend.


  • Prepaid cell phones are not free, as is the case with phones when you sign a year-long contract. This means a larger initial investment. Also, not all phone models work with prepaid plans, which means you have a limited selection on the type of phone you can use.

  • The phones are more expensive to use. The cost per minute is usually 2-3 times higher than the price per minute under contract plans.

  • Unless you are organized and keep track of your credit, you run the risk of running out of minutes when you most need them.

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Discuss this Article

Post 11

A great low cost, no-contract wireless service to consider is GIV Mobile. With their “Unlimited Everything” plans starting at $40/month, consumers not only save money, but also have the opportunity to give back. Each month GIV Mobile donates 8 percent of every customer’s monthly bill to up to three charities of his or her choice, including the Ronald McDonald House Charities, Wounded Warrior Project and the Kids in Need Foundation. Plus, GIV Mobile utilizes the fast and reliable 4G network of T-Mobile.

Post 10

Prepaid cell phones allow us to pay as we go, so we can control our spending. Various advantages and disadvantages of using this type of phones. The main advantage of prepaid cell phones is the lack of a contract. Because we are not tied to any specific company or monthly rate, we can spend as much or as little as your budget allows. Another good advantage of prepaid cell phones is that there is no credit check required to open an account.

While many disadvantages are also there that is prepaid cell phones are not free, as is the case with phones when we sign a year-long contract and prepaid cell phones are more expensive to use.

Post 9

Prepaid is definitely the way to go for me. I like being in control of my budget and paying $10 a month for my TracFone definitely keeps me in line. Believe it or not, $10 gives more than enough monthly minutes as I'm not very chatty.

Post 8

I've had a Tracfone for 4-plus years, and buy my service(minutes) on their site and save a bundle compared to the two year contracts. I travel all over the country (USA) and get equal or better service(connections), as the major services. I'll never have another contract, unless they cancel this.

Post 7

I think that prepaid cell phones are by far more affordable than contract phones. For one, they don't have the cancellation fees that keep people tied to the contract for two years at a time.

Second, you know exactly how much you'll spend a month. I have TracFone and spend about $20 a month. I only use it for emergencies so the 60 minutes i get a month is all I need. The phone's good quality but not fancy at all - it does allow me to text, but I'm not good at it. The service is phenomenal since they're on the Verizon network. I'd say this is the best feature of the plan.

I get to be with the best service provider at a fraction of the cost. So, it's prepaid all the way for me with Tracfone.

Post 6

Will all of the wonderful things that "smart phones" can do function properly when put a prepaid sim card into an unlocked "smart phone"

Post 5

I agree, although there are many other disadvantages such the health and social effects using cellphones can have on people, especially teenagers.

Being stuck to your cellphone for 20 hours of the day is not what you call "good."

Post 4

I don't know why you say prepaid cell phones can be expensive. I got my phone for $30. My company's phones are from companies like Samsung and Motorola. My phone may not have all the bells and whistles a lot of people want, but I can still check my news and weather with my phone, and text.

Post 3

I need a prepaid SIM card to work with my home security system. I'll never use it for talking, it'll just be used to call the police or any other number I program my alarm to call, in the event the alarm is triggered. I'm afraid that I'll forget to re-charge it every 90 days.. is there anything out there that I can put money on and forget about it??

Post 1

What about prepaid SIM cards then you can use any unlocked phone you want. Ive seen you can buy them online.

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