Consumer Reports: No Contract Cell Service

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    NEWSLETTERS

    Consumer Reports reviewed three major phone companies that offer no-contract cell service and found it may be cheaper to go with a contract at some carriers. NBC 6's Trina Robinson has the report. (Published Wednesday, Jun 18, 2014)

    Verizon, AT&T, and T-Mobile now all offer cell-phone service without a two-year service contract. It may sound like a good deal.

    With no-contract deals you usually get lower monthly charges, but the plans can charge hefty prices for the phones themselves. Consumer Reports compared 78 cell-phone plans from 12 different carriers. It analyzed plans for three types of people: an average, single-user; a low-use couple; and a high-use family of four.

    In all cases, Verizon proved more expensive without a contract than with one. For the family of four, the contract-free “Edge” plan costs more than $7,200 for two years of service and four new iPhones. With a two-year contract, that same family would pay $6,540.

    With AT&T, the family of four would actually save by choosing the no-contract service arrangement. With a contract it’s $6784, without a contract its $6184. T-Mobile’s no-contract deal is even better for the family of four, at $5,600. And they’ll save even more if they bring their own phones: The price goes down to $3,364. Your phone has to be compatible with the new network, and you’ll need to switch out the phone’s SIM card for a new one, but that can cost little or nothing.

    As for the low-use couple and individual user, Consumer Reports says Consumer Cellular’s no-contract service with installment payments for the phones is the best deal.

    Consumer Reports says for individuals, other deals worth checking are Net10’s and Straight Talk’s no-contract plans. However, be aware that if you don’t bring your own phone, you’ll have to pay full price for the phone up front.

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