5 Radically Different Phone Services That Could Save You Money

NEW YORK ( TheStreet) -- In today's tech-smart society, two things get our attention: innovation and saving money. Both are part of a new breed of cellular service challenging what most of us are used to in the U.S.

These five new companies have done away with the staid two-year contract tradition, plagued with overage fees and plans that no longer fit your family's needs. Some of the newbies tout free service. Some let you switch plans mid-month. Some will even credit your next bill if you don't use up your allotted minutes, texts and megabytes.

"Why are you paying so much for wireless? Why are you paying at all," asks Scratch Wireless, which offers free service for users who rely on Wi-Fi.

Of course, there are catches. There are limits on voice and data. You still have to purchase a phone -- from the company. No one offers an iPhone. The companies tend to make money on extra fees from additional services, so you've got to stay ahead of your bill if you want it to zero out each month.

While these hassles may be enough to take a pass, they also may be just the service you've sought to add a parent, child or other limited user.

These five new options also have another thing in common: They use Sprint's ( S) 3G and 4G network (a mix of the older WiMax and the newer LTE network). That means coverage is as good as your local Sprint service.

Here are the five new options to consider:


Already offering home users an alternative to high-priced broadband Internet, Los Angeles-based FreedomPop launched Freedom Phone this month. The hook? Free 3G/4G mobile phone service.

Backed by investors including Skype co-founder Niklas Zennstrom, Freedom's $99 refurbished HTC Evo quickly sold out. The company says it plans to let people to bring their own phone someday, but right now you must buy a phone from Freedom. You can get on the waiting list but keep in mind, Freedom's "free" is limited to 200 voice minutes, 500 megabytes of data and 500 texts per month.

If you can stay within that limit, your monthly bill should add up to zero (an earlier complaint that the company charged a 99-cent "active status fee" to its mobile broadband users is reportedly no longer added to new accounts). Heavier users can pay $20 for 2 gigabytes more per month. There's also an option to add unlimited voice and texting for $10.99 per month. If you don't use up all your data, megabytes can roll over -- for $3.99 per month.


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