How To Make The Jump To Saving Money With A Prepaid Plan


One of the most common questions that people ask today is how they can get started in a prepaid cellular plan without sacrificing the ‘top-tier’ device that they already have. For those carrying a new iPhone 6 or Samsung Galaxy S6, the monthly savings are tempting, until they see that it will cost them a huge chunk of cash to tale advantage of them. Step into our guide book on how to get this done with the smallest out of pocket expense you can, and possibly even put some extra cash in that wallet.

The most important part of the scenario is if you are under any form of contract, either with the service plan or the device. Carriers have changed up the model a bit in the past year or so. Instead of offering you a 2 year service contract and a free phone, they are offering you a slightly cheaper plan and a financed phone with 2 years of payments. This is what the Verizon Edge, AT&T Next and T-Mobile Simple Choice plans offer. Sprint just calls theirs a lease program, which is probably the most accurate way of saying it. Changes like this, especially after consumers are used to the older ways, scare people when it’s time to leave their carrier. It used to be a very predictable $350 early termination fee on a smartphone line and you walked away with your phone and your number.

These new offerings can now cost users $750-800 if they walk away early on, or nothing if they have paid off their device already. Unfortunately, very few people walk into the store with $700 for a new iPhone, so the financing option, or two year agreement option are usually the choice that most people make. The big question is, how can you escape the cycle and lower that bill if it’s going to cost you $1000 to make the move?


Getting Started: You really have two options when you are getting started with prepaid plans. The first is to pay off your device and use the BOYD program to an MVNO of your existing carrier (though we recommend getting the unlock code for your device before you leave your carrier anyways.) The second is to purchase a new phone outright for the carrier/network of your choice and sell your old device to make back some of the cost. Making the right choice on a new device will be crucial to saving over the long run, so do some homework before making the plunge.

Unlocked GSM phones like the 3rd Generation Moto G or the Huawei P8 Lite offer users a great experience at a fraction of the cost of an HTC or Samsung device. If you are looking at moving over to the Boost Mobile network, the LG Volt 2 offers an exceptional value at under $150. You also need to watch the specials at MVNO carriers as they will often offer a free device or a heavily discounted device to get you in the door. Even though these are ‘entry level’ handsets, they will get you started on the savings while you sell your old devices or even save for a new one. For example, with Boost Mobile, they are currently offering T-Mobile subscribers a $20 2.5GB unlimited plan for $20 a month and throwing in an HTC Desire 510 for $49.99. The first year cost of this plan won’t even clear $300, which leaves almost $300 in savings over the $40 T-Mobile plan after taxes.

If you go with an alternative carrier like FreedomPop or Republic Wireless, you have a few device options to go with, though don’t expect a super high end device. Republic is probably the best option for someone looking for a bit higher end devices as they have the Moto X (2014) for $299. Not the top of the line in comparison to your iPhone 6, but it is a very strong phone at a very good price. Of course, FreedomPop will let you activate many different models of Sprint based devices, so check out the prices for the Google Nexus 5, Moto G, and iPhone 5s to see if they are in the ranges you might consider. The $20 a month bill on FreedomPop and a nice $200 phone will rack up some savings for you pretty quickly as well.


Picking The Plan That’s Right For You: The nice thing about MVNO’s is that there really is a plan for everyone. If you are an AT&T user, you can jet over to Red Pocket Mobile and grab a plan for as little as $29.99. If you need more data, hit up Cricket Wireless for a bit better deal. If you are a T-Mobile user, cut some serious cash off your bill by moving to PTel Mobile or Giv Mobile. Of course, Sprint users can opt for many of the different Sprint MVNO’s like Boost Mobile, FreedomPop or Republic Wireless. Even Verizon users have choices at Red Pocket Mobile and Page Plus.

Take a few minutes to see how you use your device and determine which plan will work best for you. Don’t just assume you need what you have, because you probably don’t. For example, one of our editors is a power user, but is around Wi-Fi so much, something like the free FreedomPop plan would actually work for him. That plan only includes 200 minutes of talk, 500 texts and 500 MB of data, but can easily be supplemented with a few different VoIP options or Hangouts on an Android device. Look before you jump into something you don’t need. If you have an Android device, you can simply check your device usage for the last three or four months to see where you are at.

The last part to consider in getting the right plan is to see what is offered with it. FreedomPop and Republic Wireless both run off VoIP calling and messaging. This means you can have coverage anywhere you can get a Wi-Fi connection. Since Sprint’s weakest feature is their network, the VoIP calling option eliminates that to some extent making it a better value than some of the higher priced carrier plans that don’t include the service. Net 10 Wireless offers users quite a bit more data at the $45 mark than the others do. It also offers the ability to activate a device on all four major networks. For some, even cutting to $45 is a huge savings and a great first step. They also offer quite a few great prices on devices for stepping in to their network if you need one.


Ditch Your Old Hardware Or Pay It Off: This is a really tough call to make, but ultimately, you do want to pay it off. It’s going to be the only option going forward, even if you want to sell it and downgrade to a Huawei P8 Lite, Moto G or Desire 510. Basically, if you have the device financed, you will get a bill within 30 days (your final bill after porting your number from your old carrier) that will have the last month of service (or credit) and the device balance due. Be prepared to see this huge bill come in so you aren’t shocked when you see it. When you are ready, open it up and check it out.

If you have owned that iPhone for a year, your bill should show about $300-400 owed on the device. This seems like bad news, until you realize that you can sell that for $400-500 if it’s in good shape. Current generation iPhone’s are always selling higher as people want them, but don’t want to spend $750 on them. If you are only 6 months in, you might want to hold out to start the savings plan unless you have about $600 in cash laying around to payoff the device fees when they come due. Many people recommend just paying off the phones with a credit card, but we highly suggest avoiding this. Most of the time, a device gets paid off and any savings that you get from your plan will immediately get sucked into interest and payments to that card. Save up as much as you can in 3-6 months and then make your move.


How Much Will You Save: This is a bit of a loaded question, but we can take a stab at it for you… It depends on how often you want to get a new phone and how much you use it. Even the low-end devices that are coming out today are pretty amazing devices. When you pair a $200 phone with a $30 plan, you spend about $600 a year on your service. If you are more frugal, you can pair a $100 device with a $15 plan and come out even further ahead. Keep in mind, both of these options offer unlimited talk, text and a sizable chunk of data that you can supplement with your home and office Wi-Fi, so you aren’t really losing much. That $100 offering from Republic Wireless may not be the best phone ever, but it will take some snapshots and keep you in contact with everyone for an amazingly low cost – under $300 a year in most cases.

When you compare either of the options above to what you are using now, you will see how fast the savings add up. In fact, over the standard cellular bill, most people will save 60-80%. The best recommendation we can make is to sit down and visit sites like and hit their links to see what plans would be the best fit for you. The savings could be enough to take that family vacation, fund Christmas or even pick up a new car (yes, if you are paying $350 a month now and cut your bill to $60, that’s a car people!)



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