Prepaid smartphones ring free of contracts

MYRTLE BEACH, SC (WMBF) - If you love your smartphone but hate the bill that comes with it, you might want to consider signing up for prepaid wireless.

It's not just for people with bad credit anymore. There is a big selection of phones and it might just help you save on your monthly plan.

"If I can get the same service for less than half the money, I'm going for it!" says Tiffany Wong.

She switched to a prepaid wireless phone to save money. Wong got a prepaid "Droid" which includes unlimited texting, internet and phone calls for $40/month.

Her old contract-based carrier bill was about $100 per month. That $60 savings was such a good deal, she got her son Ryan a prepaid smartphone too, which he uses to surf the web.

WMBF News found the prepaid smartphone market is ringing off the hook!

The NPD Group, a leading market research company, says 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. That eliminates any surprise overage charges, which may be handy with teens and 'tweens.

"You wouldn't want to give them a high end Smartphone with an expensive post-paid plan where they might get overages on and blow out your family budget," cautions John Breyault with the National Consumers League.

If you are into technology and the latest gadgets to hit the market, you'll like this news: iPhones are now part of the prepaid market.

Two cellular providers, Virgin Mobile and Leap-Cricket, announced they're offering prepaid iPhone service. And T-Mobile says if you currently have an iPhone, ask your carrier to unlock it, bring it to their store, they'll pop in a new SIM card and you can get inexpensive prepaid service.

"Often those customers find even with a penalty to cancel a contract, they're able to save money by switching," T-Mobile's Larry Petrone says.

There are some drawbacks to having contract-free cell service. First, 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," Breyault says.

One analyst says right now the prepaid market is primarily younger, less affluent users who are "highly mobile" and live on their smartphones.

Even though Wong had to pay full price for two new smartphones, she says she's still coming out ahead.

"I don't think I'll ever go back to using a contract service again," she says.

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