The Benefits of a No-Contract Phone

BY: Groupon Editors |Feb 25, 2016

woman laughing on phone on sidewalk

Although smartphones put the world at your fingertips, they usually come with expensive contracts that last years—and termination fees if you change your mind. As you shop for a new phone, consider choosing a no-contract phone that skips the red tape in favor of month-to-month prepaid phone plans. You’ll lose none of the functionality and can potentially enjoy a number of benefits:

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Lower Cell Phone Bills

man on phone and laptop paying with credit card

The month-to-month cost of a no-contract phone is almost always considerably cheaper than a lengthy contract. Some pay-as-you-go phone providers let you carry your old device over to the new service, but even if you have to upgrade phones, the monthly savings will generally offset the upfront cost.

Switch Plans Whenever You Want

woman using phone on sunny day

Whether you spend a mere 10 minutes a month on the phone or stream every video you can find, you’ll find a monthly plan that works for you. No-contract carriers usually provide a bundle of tiered services, so you can choose a plan that offers the minutes, text, and data that you need. And if your needs change, you can easily upgrade or downgrade your plan to match them.

Say Goodbye to Termination Fees

woman switching phone services

Cancelling a phone contract early will usually result in hefty termination fees, which can total in the hundreds of dollars. If you own a no-contract phone and aren’t satisfied with your prepaid phone plan, you can simply go elsewhere whenever you want. Want to keep the same phone number? Most pay-as-you-go phone providers help you switch it over with an easy step-by-step process.

Upgrade Phones Whenever You Want

broken screen phone that needs to be upgraded

Do you switch devices frequently or immediately get your hands on the newest model? Worry not: with a no-contract phone plan, your switch to a new phone won’t affect your monthly bill.

Phone Plan Comparison

Still have questions? Check out this table for a side-by-side comparison of typical contract and no-contract phone plans.

Cost (Plan) Lower; there are usually fewer fees attached and terms are generally clearer up front Higher; some 2-year plans cost upward of $1,400
Switch Plans/Providers At any time At end of contract only
Upgrade Phones Whenever you want With contract renewal
Phone Selection Wider; phone only needs to work with provider's frequency (GSM or CDMA) Narrower; limited to specific provider's selection of devices
International Functionality With new SIM card With contract add-on 

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