Consumer Reports: Switching to Prepaid Phones

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If your monthly cell phone bill makes you cringe, especially as your budget tightens, we've long recommended considering a switch to prepaid phone service. Now a new study confirms just how rapidly this alternative to contract cell service is taking off during the current economic downturn.

Released this week by the New Millennium Research Council, the survey finds that a quarter of Americans with a cell contract are inclined to explore alternatives, including making the switch to a prepaid service.

Among the other findings:

  • Almost one in five people who currently use a prepaid phone say they switched from a contract service within the last six months, citing the recession as the cause.
  • Twenty percent of cell phone users have already cut back or are considering cutting back on service extras like email, texting, and Internet.
  • Two thirds of prepaid customers say they are saving money compared to a contract cell or landline plan.

Going prepaid or doing without extra bells and whistles are just some of the ways you might reduce your phone bill. But weigh your plan-change options with caution. Reducing the number of minutes in your contract plan could incur surprise charges. (Be vigilant about checking your monthly bill.) And avid phone-users might find that a prepaid service can cost more than a contract package of minutes and texts, so decide if a switch is in your best interest.

The advent of unlimited "everything" plans, like the one from no-contract carrier Boost Mobile, might help you save. Check to see if the umbrella price is better than à-la-carte pricing for extras, based on your phone use.



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