Cell Phone Plans - Prepaid versus Contract

If you have a cell phone for your home based business, are you happy with it? If there is one industry where there are plenty of choices it's the wireless service industry. Should you get a pre paid plan or a contract?

Contracts are generally for a two year period and they are binding in the sense that you pay (sometimes dearly) for early termination. The big advantage to contracts is that you get the phone itself very cheap (sometimes free) with a two year contract. This makes the higher end phones like Blackberry and Treo much more affordable. Generally you can get them with significant mail-in discounts. The down side of a contract is of course, you are stuck with it for the duration. If there turns out to be something you don't like, too bad!

Pre Paid plans are another story - they have made a big splash in the sour economy. In these "plans" you are not bound by a contract and you can quit the service any time you want. Many of them can be purchased with minutes "as needed"; meaning you only buy minutes as you use them. Others will give you a certain number of minutes each month (AT&T plans roll over minutes from month to month). The down side of pre paid plans is that you generally have to pay full price for the phone.

It's a trade off that a lot of people have chosen however. According to a recent article in the Dallas Business Journal, 2 year plans are down this year for AT&T - a major wireless carrier. A lot of people in this economy are simply not eager to sign up with a two year contract if they don't have to and they seem to be jumping on the pre paid bandwagon. If you don't mind paying for the phone, you might find these pans attractive.

Whichever way you go, you also need to consider the carrier. They all brag about their service but how good is it really? It's hard to know unless you try it out and that also gives the pre paid services an advantage. If you don't like the service with your pre paid plan, you can quit. While there are lots of other things to consider when buying wireless service, the type of plan is the first choice you have to make. PS: If you want an iPhone, you can only get it with a 2 year contract.