You want a cheap cell phone plan. The problem is, you don’t know where to start.
With so many plans and carriers to choose from, it’s easy to feel overwhelmed, but finding an affordable plan doesn’t have to be complicated. The trick is to understand your needs and your options.
Follow these three steps to find a cheap cell phone plan that works for you.
1. Understand your usage
A cheap plan isn’t a good deal if you’re constantly exceeding your data package, so it’s important to know how you use your phone.
Look at your last three bills. On average, how many minutes did you use? How many texts did you send? And how much data did you burn through?
With most cell phone plans, you pay for a set data package and get unlimited minutes and text messages. But if you don’t use many minutes, you can get a better deal by scaling down your plan.
Take Virgin Mobile, for example. The carrier offers 3GB of high-speed data, plus unlimited minutes and texts, for $40 per month. But you can get the same 3GB of data for just $30 if you pair it with 300 minutes. Plus, you still get limitless text messaging.
While the average smartphone owner uses 2GB to 3GB of data per month, plenty of people use 1GB or less. If you fall into the latter category, you can save money by splitting the bill on a family plan. Or go with a smaller data package, like the 300MB plan from AT&T that costs $45 per month.
For smartphone owners on the other end of the spectrum, though, an unlimited data plan might be the most affordable option. With Sprint, for example, $75 buys you virtually unlimited data. At AT&T, it buys you just 5GB of data, and at Verizon you’d spend $80 for 6GB.
2. Consider a prepaid plan
All of the major carriers have prepaid plans. And with each carrier, the prepaid plan is cheaper than the traditional plan.
| Traditional | Prepaid | |
|---|---|---|
| AT&T | $55 for 2GB | $45 for 2GB |
| Sprint | $40 for 1GB | $35 for 1GB |
| T-Mobile | $50 for 2GB | $40 for 3GB |
| Verizon | $50 for 1GB | $45 for 2GB |
You also have more options and flexibility when you go prepaid.
Don’t need data? No problem. You can get unlimited minutes and text messages with no data for $25 with T-Mobile’s prepaid service. T-Mobile does not offer a data-free option on its traditional plans.
Prepaid is also ideal for people who simply don’t use their cell phones much, thanks to pay-as-you-go-plans. These are two of the cheapest:
- Plan name: T-Mobile Prepaid Pay As You Go Plan
- Price: $3 per month
- Included: Any combination of 30 minutes or text messages
- Additional charges: 10 cents per minute or message over the 30 included in the plan
- Activation fee: $20 “SIM Starter Kit” fee waived when you buy a phone
- Bonus: Get a free $40 prepaid refill card when you buy a phone
- Plan name: AT&T GoPhone Daily Plan
- Price: $2 per day of use
- Included: Unlimited minutes and text messages
- Additional charges: Data usage is 1 cent for every 5KB
- Activation fee: No activation fee, but a $25 refill card may be added to online purchases. Customers can remove this item from the cart before checking out.
- Bonus: You pay nothing on days you don’t use your phone
One cost consideration when opting for a prepaid plan is the price of your phone.
Unlike traditional plans, which let you pay for your phone over two years or give big discounts in exchange for a commitment, prepaid plans often require you to pay full price for your phone.
That’s the bad news. The good news: You might be able to use your existing phone.
3. Look beyond the ‘big four’
Verizon, Sprint, T-Mobile and AT&T are not the only prepaid games in town. Not by a long shot.
In addition to Boost Mobile, Cricket Wireless, Virgin Mobile and MetroPCS, which are all owned by one of the major carriers, there is Straight Talk Wireless and its parent company, Tracfone.
Tracfone lets you purchase minutes, text messages and data separately. So you can pay $19.99 for 60 minutes, which are good for three months, then add 1,000 text messages for $10. All told, you’d pay roughly $10 a month.
For the same price, though, you can get unlimited minutes and messages with Republic Wireless, one of the newer players in the wireless market. Republic also has a 1GB plan for $25, which is one of the best deals out there even before you factor in that Republic will refund the cost of any data you don’t use.
Knowing how many minutes, messages and megabytes you use will help you find the best value for your needs. Just don’t forget to shop around. Some of the cheapest cell phone plans are with lesser-known prepaid providers.
Kelsey Sheehy is a staff writer at NerdWallet, a personal finance website. Email: ksheehy@nerdwallet.com. Twitter: @KelseyLSheehy.
Image via iStock.
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