Over the past couple of years prepaid mobile plans have become more and more popular, and people have been quick to adopt them. Just a few years ago prepaid plans carried the stigma of being for the economically challenged, targeting those with bad credit and only providing bare-bones service, usually limiting the amount of talk-time per month for a low rate. That is no longer the case; with the surging popularity of smartphones, mobile companies have begun offering prepaid plans that are just as full of perks and features as their contract counterparts. Now such plans come with texting, multi-media messaging, and internet data usage, all unavailable only 5 years ago, and currently included at a very competitive prices when compared to their contract phone counterparts. So what are the advantages or disadvantages of either prepaid or contract plans.

Price of Phone
Advantage: Contract
By signing a 2 year contract for a mobile plan you receive a cellphone at a very discounted rate, for example if you’re looking to get the 16gb iPhone 5, you will pay $199 at either Verizon, Sprint or AT&T; otherwise, if you choose a prepaid plan you would have to pay the full price of the phone and shell out almost $700. The disadvantage you face by using a prepaid plan is that you are tied down to the selection of phones they offer or otherwise paying the the full retail price.

Monthly Cost
Advantage: Prepaid
Prepaid plans today have all the same benefits and features as contract plans but with a lower price tag. All four major US carriers offer prepaid plans that you can chose from, but there are also new carriers like Cricket, Tracfone, Virgin Mobile and Boost Mobile that are offering great plans. Prepaid plans can now include unlimited talking, unlimited texting and messaging, and unlimited data usage all for the same price you pay or lower. Plus you have the advantage of not being tied down to a contract for a few years as you have to be with contract phones.

Advantage: Both
One of the most common argument regarding prepaid plans was cell phone coverage as they are often associated with bad coverage. if you are using a major carrier for your prepaid plan you rely on their own coverage to power you prepaid plan, but what about the lesser-known carriers? The truth is almost all of those have contracts with cell towers that belong to a major carrier, so for example, if you use Boost Mobile, you’re using cell towers that belong to Verizon. AS such, coverage should not be an issue when deciding what type of plan you are going to have on your phone.

As both plans will provide you with the same great coverage and features, the decision between a prepaid and a contract phone will fall on how important having the latest and greatest phone is to you as opposed to just having a decent phone. Mobile phone carriers sell you a phone at a highly discounted rate in exchange for a two year contract, whereas on the prepaid option you’re paying for the phone out of pocket – the full price – which might not be an option for everyone. However, you are not tied to a two year contract and you only pay for as much as you consume on a monthly basis.

Now that you have all the facts, its your turn to decide.