Gone are the days when you can only get Apple’s iPhone tied to a two-year contract, as is the case with AT&T, Verizon and Sprint.
Prepaid, no-contract plans are growing in popularity, offering unlimited data. The catch is you pay full or nearly-full price for the smartphone up front.
Those numbers crunchers at Consumer Reports compared the two primary types of plans. They found you can save $1,000 over two years by paying out-of-pocket for the iPhone 5. The monthly data and calling plans are $45-$55 a month with the no-contract carriers, compared to a $100 range with Verizon and AT&T.
Walmart and Straight Talk Wireless added a new advantage to the no-contract plan. This month, Walmart launched the latest salvo in the smartphone price wars by offering the iPhone 5 on a $45 a month unlimited plan, plus $25 a month interest-free to purchase the device at full price.
There is one drawback with the no-contract plans, such as those with Straight Talk and Cricket. They will throttle back connection speeds after 2GB of use, but “that’s a limit few smart phone users reach,” CR said. AT&T will do the same, even for those long-timers who still have unlimited data plans.
From Consumer Reports:
Lower service charges don’t mean lower quality service: In Consumer Reports’ 2013 cell service survey, Straight Talk was judged more satisfying overall than contract service from any major carrier, and it received data scores on a par with Verizon. Cricket is a newer carrier that wasn’t used by enough respondents to be covered in the survey. Both carriers claim to offer nationwide coverage.