*For an up-to-date list of my smartphone recommendations, please see this link.*
As promised in my earlier post on The Millionaire Mindset (http://froogalstoodent.blogspot.com/2014/05/the-millionaire-mindset.html), here's a tip for those of you who are paying too much for your cell phone bill (pretty much everyone!): get a prepaid monthly plan.
UPDATE 5/13/14 11:00 PM: I cannot in good conscience recommend Samsung products. They've been using legal chicanery to cover up defective batteries that can catch fire in the Galaxy S3 and S4 (for evidence, this YouTube video shows the aftermath of a phone fire--using Samsung equipment only, though Samsung denies that this is possible).
Furthermore, Samsung has a history of engaging in dishonest practices, as detailed here. So I have removed Samsung products from the examples of no-contract phones listed below. Although many of Samsung's models are available at Wal-Mart, you'd be well-served not to buy them. If you do, and your phone explodes, don't say I didn't warn you!
UPDATE 5/13/14 3:00 PM: I ran into an article detailing a free service from FreedomPop, piggybacking on Sprint's network. Comments show that you have to be extremely careful managing your usage, however, as charges add up if you exceed the limits of 200 minutes of talk, 500 texts, and 500 MB of data. So this plan is pretty limited, but might be good for people who use their phones infrequently. The article I found is here: http://www.engadget.com/2014/04/29/freedompop-iphone/?ncid=rss_truncated&cps=gravity and the original article is here: http://www.engadget.com/2013/10/01/freedompop-launches-free-wireless-service/. Fair warning, the comment section is mostly filled with complaints about FreedomPop; this kind of thing is usually enough to scare me off. A couple negative comments indicate a few bad experiences; a flood of bad comments typically indicates poor customer service/poor quality products.
Where to go
It's actually really easy if you have a Wal-Mart near you. [90% of Americans live within 15 minutes' driving distance of a Wal-Mart, so most of you have no excuse. This site has a few interesting statistics about Wal-Mart: http://www.statisticbrain.com/wal-mart-company-statistics/] If you don't go to Wal-Mart on a monthly basis but you have a different T-mobile, Virgin Mobile, Boost Mobile, MetroPCS, Aio Wireless, Page Plus, Net10, payLo, Cricket, or Consumer Cellular retailer (like a grocery chain) near you, you're set. There are a few other discount prepaid providers, as well, but the ones I've listed here are the major ones. Some run on a particular carrier's network, like Sprint or AT&T, while others may piggyback with different carriers based on where you live. Once you sign up, most of these companies have a way to pay for your minutes online, if you'd prefer--that way it's easy and convenient (and you may be able to avoid taxes as well!).
I do it the easiest way for me: since there's a Wal-Mart near my apartment, that's where I go every month for my top-up card. The smartphone I got was an HTC One V, which runs with Virgin Mobile, so I spend $35 a month for unlimited text and data, as well as 300 minutes of talk per month. For the math-phobic, that works out to five hours. ;)
My phone, the HTC One V (photo credit: Sarah Tew, CNET)The plans
The cheapest pay-as-you-go 'plan' (that is, not just paying for a certain amount of minutes) available at Wal-Mart is T-mobile's $30/month plan, which gets you unlimited text and data, but only 100 minutes of talk per month. If you're like many young people, you text your friends and family more than you talk, so it shouldn't be a problem to use this plan. Another option, if you like to talk, is to download a voice-over-internet app such as Google Voice, Skype, Rebtel, or Tango.
Net10 cards are available for $35 for unlimited talk and text, but no data. TracFone offers cards with a certain number of minutes; most other prepaid carriers do the same (like Cricket, TracFone, or AT&T, as well as Virgin Mobile or T-mobile).
If you'd prefer unlimited everything, Wal-Mart pushes their "Straight Talk" option, a Wal-Mart branded option that gets you unlimited text, data, and calls. Best of all, it's only $45 per month! Compare this to the monthly cost on a 2-year contract with most major carriers, who charge $75 per month or more! Depending on where you live, Straight Talk piggybacks with AT&T, T-mobile, Verizon, or Sprint.
So there are a variety of options to fit what you typically do on your phone. And having a great number of choices creates competition, which tends to drive down prices and improve customer service!
Although several of the plans described above say 'unlimited' data, the terms of service specify that after excessive use, your speed will be throttled down (which is the same thing that major carriers do on their 2-year contracts, anyway). The terms don't always specify where that limit lies, but for most carriers, it's 2-3 GB. For my plan through Virgin Mobile, it's 2.5 GB. Since I'm typically near a much faster laptop or computer lab with Internet access, I've never even used my phone for more than 1 GB.
Depending on what plan you choose, different phones will be available. Some phones may be available on several different carriers; others may be available on only one. The catch with using these prepaid plans is that you have to pay retail for the phone. With 2-year contracts, major carriers heavily subsidize the latest phones, costing the consumer $50 or $100 for the flagship models.
(Disclaimer: the following prices are accurate as of May 13, 2014. Prices can and will change.)
Once you've picked a plan that suits your needs and your budget, do some research on which phone you want. You'll find that most of these prepaid plans still give you a variety of options. Straight Talk has some premium options like the iPhone 5S ($649), if you desire the latest tech.
Net10 also has iPhone 4S ($449) or 5S ($649), and T-mobile even offers the Galaxy S5 ($675)! [As mentioned in the above update, Samsung phones are a fire risk, and Samsung is not an honorable company.] Older versions like the iPhone 4S, though discounted, are still pricey.
Google's latest phone, the Nexus 5, starts at $349 unlocked, so you can use it with any carrier who will support it. The HTC One Unlocked is priced at $500, and since this model is unlocked, you can also use it with any participating carrier. There is some excitement among phone enthusiasts over the OnePlus One, a phone with top-shelf specs but a midrange price. Due out June 2014, this phone will start at $300--approximately half the price of the phones its meant to compete with--and it's expected to run on T-mobile and AT&T. So, you can still have a premium phone without being locked into an expensive contract.
Understand that when you're on a 2-year contract, you pay so much more on a monthly basis that you'll end up paying for the phone two or three times over! So even though paying for a phone up front seems like a ton of money (it is!), you'll end up saving hundreds of dollars over the life of the phone.
There are even cheaper phones, too--one of the sub-$100 phones reputed to have good quality is the Nokia Lumia 520 ($66), a Windows phone. There are also several models of Android phone for under $100, such as an LG Optimus F3 ($80) that is also highly recommended by users. You'd be well-advised to take a look at people's reviews on walmart.com before buying, because some of the cheap phones actually boast pretty good quality; others definitely do not.
Since your phone can be considered a major purchase, it requires research on your part. You have to find the best fit for you; and you may end up deciding on a plan, only to find that it doesn't support the phone you wanted :(
Here are some links to check out (as always, prices are subject to change):
HTC One Mini http://amzn.to/1iWhjyV; $325 (UPDATE 8/3/14: even better than the $360 price in May!)Nexus 5 by Google: https://play.google.com/store/devices/details?id=nexus_5_black_16gb; $350
HTC Desire 601 (Virgin Mobile only) http://amzn.to/1pXJ9Nq; $215
HTC Desire 601 (Virgin Mobile only) http://amzn.to/1pXJ9Nq; $215
Motorola Moto E: http://amzn.to/1lzRjnv; $130
ASUS Zenfone 5: http://amzn.to/1qyCn0H; $200
HTC Desire 510 (to be offered for $150 through Cricket Wireless, starting in September 2014): http://www.gsmarena.com/cricket_wireless_will_offer_htc_desire_510_in_the_united_states-news-9610.php; $150
Sony Experia Z: http://amzn.to/1m9fq0o; $340
Sony Experia Z: http://amzn.to/1m9fq0o; $340
Motorola Moto G: http://amzn.to/1iY9nN6; $175
Motorola Moto X: http://amzn.to/1lTPLtm; $300Nokia Lumia 521 Windows phone: http://amzn.to/1lTJEVQ; $80 (UPDATE 8/3/14: up $10 from the price in May)
HTC One (M7; previous-gen): http://amzn.to/1mUqwHy; $500 (UPDATE 8/3/14: up $100 from the price in May)
White Unlocked iPhone 5: http://amzn.to/1mKtTvV; $525 (UPDATE 8/3/14: up $20 from the price in May)
Black Unlocked iPhone 5: http://amzn.to/VFDNK4; $510
The following list consists of phones that are either slower than I'd be comfortable with, based on older technology (and possibly not well-supported in the future), or very new and expensive. Not recommended for everyone.
Nokia Lumia 520 Windows phone: http://amzn.to/1lTLsOC; $104
HTC One (M8; new): http://amzn.to/1lTMj1H; $630 (UPDATE 8/3/14: down $40 from the price in May)
ASUS Zenfone 4: http://amzn.to/1pyyXZ2; $150 (UPDATE 8/3/14: down $20 from the price in May)
HTC One X (not related to the newer HTC One M7 or M8): http://amzn.to/1lTPjev; $225 (UPDATE 8/3/14: down $15 from the price in May)
Some smartphones do give you access to the SIM card, which would allow you to buy a SIM card from the carrier you want, or buy a cheap $15 or $20 phone that IS supported by your network and simply swap SIM cards. I wouldn't necessarily advise this, but if that's the route you really want to take, there are guides and tutorials online that can help you. Thoroughly check it out before you take this route, though!!!
Another possibility, if you really like your current phone, is to keep it, and when your contract runs out, to swap in a SIM card from one of the prepaid carriers, as described in the previous paragraph. If you can't get to your SIM card, check your carrier to see if they'll let you switch to a prepaid plan when your contract runs out.
If not, and/or you want to get a new phone anyway, older phones can be sold to local electronics merchants, or you can sell it online to any of a number of cell phone resellers (see here for a list: http://www.clarkhoward.com/news/clark-howard/technology/sell-your-old-cell-phone-these-sites/nShcG/), or you can get an Amazon gift card from trading your old phone in to Amazon.
In sum, there are lots of options for carriers, plans, and phones--the variety and quality of prepaid phones have gotten much better in the last couple of years, but it's a great option that will ultimately save you a ton of money--and you can even get a great phone with it! The best resource I've found is simply to explore the options available at http://www.walmart.com/cp/No-Contract-Phones-Plans/1072335?povid=P1171-C1110.2784+1455.2776+1115.2956-L38 and find something that fits both your needs and your budget!