ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Pay As You Go Mobile Phones: A Practical Alternative to the Cell Phone Contract in These Tough Economic Times

Updated on July 12, 2011

Getting Creative With Your Cellular Contract

Pay as you go cell phones are not new, but it may be a good time for those who haven’t considered a prepaid cell phone in the past to do some research and possibly consider switching to such a plan.

To beat (or, should I say, survive ) this tough economy, it takes patience, perseverance, dedication and creativity. One way in which it can literally pay to be creative is to not only look for ways to increase income, but to look for ways to decrease the amount of dollars that are leaving your household every month. One creative measure that can be taken, depending on your and/or your family’s cellular phone usage patterns, is a pay as you go cellular plan.


Recent Growth in the Prepaid Cell Phone Market

Providers have been offering mobile phones with pay as you go usage plans since the early 1990s, but it was not until recently that such cellular phone plans started becoming popular to consumers in the United States (in Europe, prepaid plans have long been the plans of choice by consumers).

The ongoing recession and high rates of unemployment in the United States have turned the tide for the pay as you go mobile phone plan in the States.

According to Craig Moffett, a Sanford Bernstein equities analyst who was quoted in a CNET article, the first quarter of 2009 saw traditional cellular plan growth pretty much come to a standstill, whereas the prepaid cell phone market accounted for approximately 80 percent of cell phone subscriber growth.

Since then we have seen even higher unemployment and ongoing record foreclosures, accounting at least in part for the continued growth of the prepaid cellular market through 2010.

Why Consider a Pay as You Go Cellular Plan?

The reasons to consider switching to prepaid cellular plans in this economy are many. Pay as you go cell phones have many advantages over the more traditional cellular plans where the consumer signs a contract, typically for one or two years, with a cellular phone service provider and is then billed monthly for their cellular phone usage of the previous month.

For one, there is no credit check necessary to get a cell phone with a prepaid plan. For those who have lost their jobs and fallen behind on bills, or for those who have lost their homes to foreclosure, getting a traditional cellular phone may no longer be an option, at least for the short term. For those who fall into this category, pay as you go plans may be the perfect solution.

Secondly, a prepaid cellular plan can definitely save you money over a traditional cellular plan, particularly if you don’t use the phone very often. With a traditional cellular plan, if your monthly bill for unlimited calling is $65.00, you will be charged $65.00 even if you don’t make one call during the entire month. With a pay as you go plan cellular phone plan, you would be charged nothing during that same month.

These are just two advantages of having a prepaid cellular phone plan. Other advantages, some of which were cited by respondents in a Nielson survey, include not having to worry about a monthly bill, no contracts or early termination fees, no need to have a credit card in some cases (laws on this vary from state to state), simplicity, and a good option for teenagers, many of whom would talk forever with a traditional unlimited plan, but who have to learn to ration their talking minutes with a prepaid plan.

The main thing for those looking to switch to save money is to look at your cell phone usage patterns, decide how much of that is necessary and how much of it could be curbed, and then take a look at some prepaid plans to determine if switching will be a cost-saving measure. If so, make the switch and then have fun counting the cash you’ve saved!



    0 of 8192 characters used
    Post Comment

    • Mike's Corner profile imageAUTHOR

      Mike's Corner 

      7 years ago from Maryland

      Haha -- yes, without a computer I suppose it would be hard to justify the $39 :)

    • Pixienot profile image


      7 years ago from Clarksville, Indiana

      Yes it is. I love Magic Jack and the connection quality is great. So far (and I've had it over a year) there is no downside to Magic Jack (unless, of course, if you do not have a computer)! :)

    • Mike's Corner profile imageAUTHOR

      Mike's Corner 

      7 years ago from Maryland

      Great to hear that you have taken advantage of the prepaid cellular option, Pixienot. Hopefully more people will become aware of this option and the savings that it can bring.

      I've seen the Magic Jack commercials . . . that is an unbelievably inexpensive way to make calls!

    • Pixienot profile image


      7 years ago from Clarksville, Indiana

      Mike, you are so right. Last year we switched to TracPhone and have found that our cell bill is cut in thirds.

      We also invested in a Magic Jack system that plugs into the computer ($39). It cost us $19 a year to use the Magic Jack and we can make all of the long distance calls we wish; and talk as long as we like. We can also make local calls.

      With these two investments we have saved tons of money and been able to keep in touch with our other family that is not near by.

      Great hub! Good advice. Thank you!!


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)