Cell phone contracts vs, pre paid.

By JimBob on January 21, 2011 In Finance

When you are considering cell phone contracts with bad credit, consider the option of using pre-paid instead. One of the first things you need to know are the pros and cons of a contract plan or a pre-paid plan.
Advantages of prepaid:
By using a prepaid plan, you do not need a contract. You are free to switch whenever you want just in case you are not satisfied with your present provider. Also, there is no age limit as to who can use prepaid service, if you have the cash you can buy it. Compared to postpaid (contract) plans, including cell phone contracts with bad credit, there are no worries about monthly bills because you only pay for what you use unless you have a pre paid unlimited plan then you pay a flat monthly fee. If you happen to have used up your airtime balance, then you simply need to fund your prepaid account.
Disadvantages of using prepaid:
Using prepaid service has drawbacks which may push some to use cell phone contracts with bad credit. Cellular phone carriers do not allow, at this time, pre paid users to “roam”. So if you leave your providers service area you don’t have service. This is perhaps the major disadvantage of a prepaid plan. But unless you travel a lot this won’t be a concern for you.
Advantages of using a long term contract:
All post-paid users, even those who have cell phone contracts with bad credit, will enjoy many benefits of a standard long term contract. You will have a fixed monthly payment, unless you exceed the airtime allotment. Most of all, you will have coverage if you leave your carriers service area. For some carriers, text messaging is even free. While most providers have 2-year contracts, they often provide free phones, they build the price of the phone into the rate and this is why they need you to stay with them for 2 years.
Disadvantages of a standard long term contract:
You need to pay the minimum monthly payment on your plan even if you are not using your phone. Some of those who obtain cell phone contracts with bad credit may find it an added burden if their next monthly bill arrives. In addition, since you are on a 2-year contract, you cannot switch to another provider if you are not satisfied with their service. A long term contract also requires a credit check. If you qualify for a cellular contract then after some time, you default on your monthly payments; the provider will let the credit agency know about it. This is, however, nothing to be worried about for those who have cell phone contracts with bad credit if they make their monthly payments on time.
Cellular phone service providers will be hesitant to approve cell phone contracts with bad credit. They would want to make sure that their clients are prompt payers. Then again, with the tough competition in the cellular phone market today, they are open for negotiation especially if you are willing to pay a little extra, like a deposit, for cell phone contracts with bad credit.
The advantages and disadvantages of cell phone contracts with bad credit over using a pre-paid have been clearly defined. The choice, however, is dependent on individual requirements. For instance, some users cannot use all the minutes of a plan because they simply don’t need to call often. Using prepaid is the most feasible for them. On the other hand, others need to travel out of their carrier’s service area on a regular basis. Thus, they would need cell phone contracts with bad credit.

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