If you think prepaid wireless is for people who have bad credit, we have news for you. Now, even the most popular smartphones are available for prepaid users. It may be worth considering if you'd like to shave some bucks on your cell plan.
Tiffany Wong switched to a prepaid wireless cellphone. She has six kids and needed to save money.
"If I can get the same service for less than half the money I'm going for it," she said.
Wong got a prepaid Droid which includes unlimited texting, Internet and phone calls for $40 a month.
Her old contract-based carrier bill was about $100 a month for the same services and benefits.
The $60 a month savings was such a good deal, she got her son Ryan a prepaid smartphone too, which he uses to surf the web.
"Since there's 8 of us, 8 people in my family, someone's almost always using the computer," said Ryan.
The prepaid cell phone market is ringing off the hook, so-to-speak. Sales more than tripled over the past year. Customers ditching those annual contracts are now one of the fastest growing smartphone segments in the United States.
With prepaid mobile, you don't make any contract commitments to one carrier. And, you pay a set flat monthly fee upfront, eliminating any surprise overage charges, which may be handy with tweens.
"You wouldn't want to give them a high end smart phone with an expensive post paid plan where they might get overages on and blow out your family budget," said John Breyault, Vice President of Public Policy, Telecommunications and Fraud for the National Consumers League.
The newest news to hit the prepaid market: iPhones. Now two cellular providers, Virgin Mobile and Leap-Cricket announced they're offering prepaid iPhone service.
T-Mobile says if you currently have an iPhone, ask your carrier to unlock it, bring it to their store and they'll pop in a new SIM card and you can get prepaid service.
"Often those customers find even with a penalty to cancel a contract they're able to save money by switching," said Larry Petrone with T-Mobile.
There are some drawbacks to having contract-free cell service. If you want a smartphone, you'll pay the entire retail cost of the device, which can be more than $500 in some cases. And very few prepaid family plans are available, so you really need to figure out the savings for your household.
"You have to incorporate the higher upfront cost of the device itself versus the cost of keeping, adding another line to your family plan," said Breyault.
Even though Tiffany Wong had to pay full price for two new smartphones, she said she's still coming out ahead.
"I don't think I'll ever go back to using a contract service again," she said.
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