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Consumer Reports: No-Contract Cell Service

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    NEWSLETTERS

    Verizon, AT&T, and T-Mobile now all offer cell-phone service without a two-year service contract. It may sound like a good deal. With no-contract deals you usually get lower monthly charges, but the plans can charge hefty prices for the phones themselves. Consumer Reports compared 78 cell-phone plans from 12 different carriers. It analyzed plans for three types of people: an average, single-user; a low-use couple; and a high-use family of four (Published Tuesday, Aug 19, 2014)

    Verizon, AT&T, and T-Mobile now all offer cell-phone service without a two-year service contract. It may sound like a good deal.

    With no-contract deals you usually get lower monthly charges, but the plans can charge hefty prices for the phones themselves. Consumer Reports compared 78 cell-phone plans from 12 different carriers. It analyzed plans for three types of people: an average, single-user; a low-use couple; and a high-use family of four.

    In all cases, Verizon proved more expensive without a contract than with one. For the family of four, the contract-free “Edge” plan costs more than $7,200 for two years of service and four new iPhones. With a two-year contract, that same family would pay $6,540.

    With AT&T, the family of four would actually save by choosing the no-contract service arrangement. With a contract it’s $6784, without a contract its $6184.

    T-Mobile’s no-contract deal is even better for the family of four, at $5,600. And they’ll save even more if they bring their own phones: The price goes down to $3,364. Your phone has to be compatible with the new network, and you’ll need to switch out the phone’s SIM card for a new one, but that can cost little or nothing.

    As for the low-use couple and individual user, Consumer Reports says Consumer Cellular’s no-contract service with installment payments for the phones is the best deal.

    Consumer Reports says for individuals, other deals worth checking are Net10’s and Straight Talk’s no-contract plans. However, be aware that if you don’t bring your own phone, you’ll have to pay full price for the phone up front.

    Complete Ratings and recommendations on all kinds of products, including appliances, cars & trucks, and electronic gear, are available on Consumer Reportswebsite.