Choosing a Contract Cell Phone Plan

Understanding how contract cell phones work will allow you to make an informed decision before committing to a long-term service contract. 2-year phone contracts make sense if you frequently use your phone to make calls, always access the internet, have a family, run a business, or want to upgrade your phone at a discount.


The main reason to go with a contract phone plan will be based on the amount you use your phone. Since most phone plans, contract or prepaid, are based on a certain amount of minutes, a contract phone will cost less per minute in the long run. That is assuming you will consistently use most or all of your monthly call minutes. A certain amount of texting and picture messaging is usually bundled with most contract plans.

Data Plans

In addition to minutes, a data plan may need to be attached. Data plans allow access to the internet in order to check email, download apps, visit websites, watch videos, and stream music. Determining your data needs may be a little tricky since different factors affect your data usage. Data is consumed on your phone directly and indirectly by the apps installed. When apps, like Facebook or YouTube, are actively being used, those apps require web access in order to function and directly consume data. Apps that are not currently being used, such as email or Facebook, may still be running in the background and indirectly accessing data from the web. Therefore, it may be a good idea to start with the least expensive data plan, monitor your data usage closely, and adjust your plan the following month.

Family Plans

If you have a family, most cell phone companies have family plans (or shared plans) that may save you money. The savings come from adding additional phone lines at a lower rate than a single line. Minutes are shared among family members and a family plan provides flexibility for the usage of minutes. Family members that normally use more minutes can enjoy increased talk time while the less talkative members can save on costs. However, each family member should be aware of the available minutes remaining each month to avoid overage charges. A similar shared plan may be done with data plans.

Cell Phone Upgrades

With contract plans, some carriers provide the option for customers to purchase or upgrade to some of the newest cell phones at a discount. The reason cell phone companies are able to provide such discounts is because the cost of the mobile phone is subsidized and built into the duration of the cell phone contract. This way you can enjoy having the latest wireless technology at a lower cost than purchasing the same cell phone without a contract.

If you are ready to select a prepaid cell phone, you can see our list of prepaid phone service providers or full list of wireless carriers.

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