Is a No-Contract Cellphone Right for You?

Plans and Services

If all you do with your phone is make and receive calls, your shopping is relatively simple. You'll need to consider not just the total number of minutes you spend on the phone each month, but who you call and when. Most no-contract plans count every minute, while contract plans may provide free nights and weekends, or free calls to others in the same carrier network, or to a selected group, which could make these more economical choices if your calling pattern fits their offers.

If you call very infrequently, there are no-contract plans that charge nothing on days you don't use the phone. Of course, as with all cellular service, both the calls you make and the calls you receive count as airtime minutes.

Using your phone for nonvoice communication is becoming increasingly important for many users. In a recent Consumer Reports survey, 75 percent of respondents said they used their phones for texting as well as voice calls, and 50 percent used them for online access to e-mail or the Web. Texting is possible with any handset. Charges may be calculated for each text sent or received, or you can sign up for a plan with a flat fee for a specified number of texts.

For serious mail and Web access, you'll need a more sophisticated phone and a plan that includes data access. This is increasingly possible with no-contract plans. No, you can't get an iPhone without a contract, but you will find quite a few feature phones that handle Web browsing and e-mail well, and some smartphones (which let you install downloadable applications) run Android and BlackBerry software.

Phones

The phone selection available without signing a contract has expanded substantially. In fact, both T-Mobile and Verizon now offer nearly all their phone models with or without a contract, and other carriers have expanded their selection to support more online features. Phone prices on prepaid plans have dropped, too. It will often take just a few months for the savings on your monthly no-contract bill to exceed what you paid for the phone up front.

For example, Boost Mobile has the Samsung Seek, with a slide-out keypad and touch screen, for $149. If you're the type who loves to send and receive text messages, this is a fine choice, particularly when paired with Boost's $50 unlimited monthly plan. You can also access e-mail from Yahoo, AOL, Hotmail and MSN, and listen to music if you add a memory card.

For a full-on smartphone, Virgin Mobile has the LG Optimus V, an Android phone with a pretty 3.2-inch touchscreen, sophisticated Web browsing and e-mail capabilities, and full software app download options, for $149.99. There are three rate plans, all with unlimited text and data, starting at $25 a month for 300 anytime minutes.

What about all those free phone offers you hear advertised? You'd think this would be out of the question without signing a contract, but Consumer Cellular has a basic Motorola model, the WX345 flip phone, available at no charge, and without a contract. It has a 2-megapixel camera, FM radio and support for Bluetooth wireless headsets. And if that doesn't appeal, you'll find handsets from other providers starting as low as $10.