$50 a month for unlimited data, texting, and talking without a contract - How to save over $1000 a year on your cell phone bill

Can you really have the latest and greatest smartphones and only pay $50 per month for unlimited data, texting, and talking and not have a contract?  You sure can.  First you will need to have an unlocked smartphone.  You can buy any unlocked smartphone, as long as it can run on a GSM network.  AT&T and T-Mobile are examples of GSM networks.  Phones that run on Verizon and Sprint are CDMA phones and won't work with these plans.  GSM phones have a place to put a SIM card and CDMA phones do not have SIM cards.  I bought the unlocked Nexus 4 straight from Google and they sell at $299 for the 8GB version and $349 for the 16GB version.  That is not subsidized and you will not need a contract to buy the phone.

Have a locked iPhone?  No problem

If you already have a locked GSM iPhone, then for just a few dollars or even free (in some cases), you can unlock it. For example, my coworker had a locked iPhone 4S on AT&T that he wanted to sell when he bought the iPhone 5.  My coworker went to this web page and filled out the request to have the iPhone unlocked for free.  As long as that line is off contract, AT&T will unlock it for free, otherwise you may need the threaten to cancel if you want them to unlock it.  This way will work if the person you bought the phone from is willing to do this for you and on AT&T.  

Your other option is eBay.  You can just go to ebay.com and search for "unlock iPhone".  Once you find a reputable seller (Over 10,000 reviews at least), you can pay them to unlock it.  Once you have made the purchase of the unlock, you send them the IMEI number for your iPhone.  Here is the help article from Apple on finding the IMEI number.  Once you wait the one to 24 hours, get your confirmation email that it is unlocked, you can plug in the iPhone to your computer, backup the phone, and when you restore the phone it will be unlocked.  I have had a friend buy this unlock for $4 and was successful with unlocking an iPhone 3GS and iPhone 4.  Once it is unlocked, you can get onto wi-fi and download the APN settings for your specific carrier by going to http://www.unlockit.co.nz on your iPhone.

Google Voice

Google Voice is a central phone number that will send calls and texts to any phone you own.  You get voicemail to text transcriptions, you can call and text from your browser and phone using your Google Voice number, and you can create custom voicemails for specific callers.  Here is a video from Google that explains it better.  The best part is that it is a totally free service.

Both my wife and I have ported the phone numbers that we have had for years into Google Voice, so that people can continue to call our same phone numbers.  You can get a new Google Voice number for free, but its was worth it to pay the one time $20 fee to port each of our numbers into Google Voice.  Now that we have Google Voice, we can switch to any prepaid carrier, get a new phone number at each carrier, and just have our Google Voice number send phone calls and text messages to our new number.  If I wanted, I could get a new phone and switch carriers every month, but anyone calling me would never know, as they will be calling the same phone number that they always have in the past.

Google Voice has been a key piece of switching to prepaid carriers for me and I would highly recommend porting your number to it.  Just beware that the process of porting your number will cancel your current contract with your carrier and you may have to pay early termination fees if you are still under contract.  Here is the website for Google Voice.

Overview of contract-free carriers with unlimited data, texting, and talking

There are a few carriers that offer unlimited data, texting, and talking and here is a breakdown of their costs:

• Simple Mobile
• Website
• $50 per month and they don't charge taxes in addition to the $50.
• $14.99 for micro SIM or standard SIM card.
• If you go to Amazon.com and search for “Simple Mobile micro SIM”, you can buy a micro SIM or standard SIM for less than $1.  Here is a link to that search on Amazon.  I paid $0.38 with free shipping for mine.
• HSPA+ 3G/4G speeds.
• They have contract with T-Mobile for wireless coverage.

• Straight Talk
• Website
• $45 per month, plus about $5 taxes.
• $14.99 for standard SIM or micro SIM.
• HSPA+ 3G/4G speeds.
• They have contract with AT&T and T-Mobile for wireless coverage.
• When you buy micro SIM or standard SIM card, you get to choose whether you want an AT&T or T-Mobile SIM card.

• Net10
• Website
• $50 per month, $40 for each additional line.
• $5 per month discount for auto-pay.
• $9.99 for micro SIM card.
• HSPA+ 3G/4G speeds.
• They have contract with AT&T for wireless coverage.

 

• Solavia
• Website
• $49 per month.
• $49 one time startup fee.
• Solavia will pay you $20 per month for every 3 new customers that you get to sign up for their service and will continue to give you $20 per month as long as those individuals continue their service with Solavia.
• HSPA+ 3G/4G speeds.
• They have contract with T-Mobile for wireless coverage.

Alternative carrier - $19 per month

• Republic wireless
• Website
• $19 per month.
• You pay $249 for the Motorola Defy XT.  This will be your only option for a phone.
• $10 startup fee.
• What is the catch? You have to try your best to spend time on wi-fi.  They can keep the plan cost so low because they send calls, texts, and data through wi-fi when you are on it.
• If you are not on wi-fi, you get 3G data on the Sprint network.

Protection from damage and accidents

If you would like to have the same kind of coverage now that I had to pay $15 per month for with Sprint, you can pay $6.99 per month or $125 for two years to Squaretrade for cell phone insurance that includes accident protection.

Savings breakdown

Under contract with Sprint

• We paid $450 for both our phones combined, which were subsidized by Sprint for signing a two year contract.
• Our monthly bill, including insurance was $173.
• The first year of our contract, including phones, we paid $2526.
• The second year of the contract, we did not buy new phones and had we finished the contract, we would have paid $2076.
• Total for two years: $4602

Contract-free providers

• I paid $350 for my unlocked 16GB Nexus 4.
• We bought a used iPhone 4S for my wife for $300.
• Paid $20 for two micro SIM cards.
• Our monthly bill on Straight Talk and Simple Mobile is $100 total.*
• The first year of service, including phones, will be $1850.
• The second year of service we won't be buying phones and will just pay $1200.
• Total for two years: $3070
• If I buy Squaretrade insurance for both phones for two years, the total for two years will be $3320.  At the moment I am going to not get insurance, but I may change my mind.

*We plan on switching carriers every couple of months to find out which one we like best.  Right now my wife is on Straight Talk and I'm on Simple Mobile, but we will be switching to Net10 or Solavia next month.  If we switch to Net10, it will be $85 per month.

The early termination fee is worth it

The cost difference between being on contract with Sprint and going with a prepaid, contract-free provider is $1500.  I had to pay $50 per line in an early termination fee to Sprint and it was clearly worth it.  

Drawbacks

The main drawback with these services is that you won't have LTE.  If not having LTE speeds is a deal-breaker for you, then these plans aren't for you.  The other drawback is that you won't have a store to go to when you have technical issues or need support.  With Verizon, AT&T, Sprint, and T-Mobile, you can just head to the nearest store or call their support lines.  The contract-free, prepaid services mostly rely on email support and do have phone numbers to call, but they don't have as extensive of technical support as the main four carriers.  If you have a tech-savvy friend, can follow the directions on the carrier's websites, or can read through online forums to solve your problems, you will be just fine.  

Final thoughts

I may not have LTE speeds, but with Wi-Fi work and home and 5-10 mbps when I am mobile, I am very happy.  I am saving lots of money and still can have the best smartphones.  I enjoy having Google Voice, not having a contract, and being able to switch carriers any time I want.  Do you use different carriers for unlimited data, texting, and talking with no contract?  If so, please post in the comments and post any of your other thoughts or tips.