No-contract cell phones were introduced in the early 1990s. Until that time, most cell phone owners were bound by minimum two-year agreements. If they wanted to cancel or change their plan, they had to pay a fee. No-contract wireless devices have emerged as an attractive alternative to service agreements. T-mobile, Boost Mobile, Virgin Mobile, Tracfone, Verizon, AT&T. Metro PCS and Sprint are some of the cell phone companies that specialize in no-contract plans.

What are mobile phones without a contract?

We all know what ‘No Contract Cell Phones’ are, we just know them by a different name. This mobile plan is widely known as a prepaid or pay-as-you-go scheme. The system is different from a traditional postpaid scheme in which users must sign a contract for one or two years. At the end of the month, they receive a bill based on the previous month’s usage.

Unlike this, in a prepaid plan you pay before using. Users have to buy and load minutes on their phone card in order to call or text others. Minutes are available in small and large packages. For example, 50 minutes for $10. When the available minutes are exhausted, the user must top up the card with additional minutes to continue using it. Minutes can be purchased at local stores and newsstands.

There is another monthly payment scheme within the prepaid system. In this plan, a user is offered unlimited services for a specific duration, 30 or 90 days, for a predetermined price. A user pays the charges in advance.

The advantages

There are several advantages to choosing no-contract cell phones over a postpaid plan.

• With a no-contract cell phone plan, you don’t have to commit to one- or two-year plans. If you don’t like a service provider, you can switch to another provider and take advantage of competitive calling rates and special promotions.
• One has to be 18 years of age to qualify for a postpaid plan. You will also be required to provide proof of identity, provide personal details and hold a security deposit. People under the age of 18 with a bad credit score can find it very difficult to get a reasonable postpaid plan. A prepaid plan does not have a minimum age requirement and does not ask for too much personal data.
• Mobile phones without a contract also turn out to be a profitable option, especially in the hands of teenagers. We have enough bills to pay, and an exorbitant phone bill can put a strain on your budget. There is no chance of going over your budget with a prepaid plan as the phone stops working as soon as the minutes run out.

The disadvantages

The system also has some drawbacks. We have listed them below.

• The first limitation is the absence of discounts on the devices. A consumer who chooses not to sign a contract must purchase the device at its regular retail price.
• Selection is limited when it comes to choosing a cell phone.
• Prepaid customers may miss out on some features that are offered exclusively to postpaid customers.

If you opt for mobile phones without a contract, we recommend that you visit the operator’s website before making a purchase. It will give you an overview of your recharge schemes and monthly payments.