How to Choose a Cell Phone Plan

by Ken Burnside
As phones have transformed from communications devices to general computation devices, plan options have proliferated.

As phones have transformed from communications devices to general computation devices, plan options have proliferated.

With multiple nationwide and regional carriers, buying a cell phone and getting the right plan has turned into a confusing muddle of options. Before you sign a contract, ask yourself questions about what services you use, what your budget is and how often you travel and where. The answers to all of these questions, and more, will help narrow down the options until you find a plan that matches your usage patterns and actual needs.

Contract Types

There are three basic types of cell phone contracts: two-year contracts that bill you monthly for the calls made, month-to-month contracts where you pay at the beginning of the month for that month's services, and prepaid phones where you load minutes to a phone that get expended as you make calls. Carriers such as AT&T, Verizon and Sprint focus on two-year contracts and put extensive penalties for leaving the contract early but offer deep discounts on telephones. Other carriers and vendors offer both two-year contracts and month-to-month plans. Prepaid phone plans, such as those offered by Net10 and TracPhone, are targeted at customers who use their cell phone as a secondary phone line. Compare month-to-month and two-year contract plans by multiplying the monthly bill by twenty-four and deducting the full retail price of the phone you're getting.

Telephone Upgrades

Cell phones last from one to three years of general use. Causes for replacement are either battery related or technological obsolescence for smartphones. Major carriers sweeten two-year contracts with discounted phones or phone upgrades, sometimes discounting them down to "free" phones. Minor carriers will sell the same phone at full price, but don't tie you to a specific contract. For prepaid plans, the selection of phones will be the most basic phones available. One reason to seriously consider month-to-month plans is if you already own a phone that you like that works with that carrier's network.

Calling Plans

While it gets lost in the promotional hype, making calls is why most people own cell phones. Your choice of carrier should start with calling areas, and your monthly bill should be set by how much time you spend talking on the phone. Major carriers have the widest coverage areas for voice and data. Smaller carriers might not have the same coverage, but are usually much cheaper. Compare the coverage maps of different carriers. If you stay within the coverage areas of smaller carriers, the savings can be substantial. Costs per minute drop as you buy more minutes for your monthly plan. This extends to shared minutes or family plans where a number of phones draw from the same pool of minutes.

Data Plans

If you don't have a smartphone, you don't need a data plan. Data plans are defined by the download speed of the plan and the data cap on the plan -- the maximum total download amount each month. Download speeds are 2G (very rare now), 3G (roughly twice to three times the speed of a telephone modem) and 4G (roughly equal to the speed of a cable modem service). The 2G and 3G data networks cover most of the country; all of the carriers have some coverage for 4G, with AT&T and Verizon having the widest 4G coverage plans. Your data cap is defined by your usage. If you view only static Web pages and check your email without downloading attachments, you can get by with the smallest data cap offered. If you watch YouTube videos, do Skype over the phone, upload photos or videos to Facebook, or use a telephone mapping service, your data usage rates are going to climb fast. Currently, 3G-only plans are cheaper than 4G plans, and some older 3G plans have unlimited data.

About the Author

Ken Burnside has been writing freelance since 1990, contributing to publications as diverse as "Pyramid" and "Training & Simulations Journal." A Microsoft MVP in Excel, he holds a Bachelor of Arts in English from the University of Alaska. He won the Origins Award for Attack Vector: Tactical, a board game about space combat.

Photo Credits

  • Jupiterimages/Photos.com/Getty Images