Contract-Free Cell Service Most Affordable?

Verizon, A-T-and-T, and T-Mobile now all offer cell-phone service without a two-year service contract. It may sound like a good deal, but Consumer Reports studied 78 options - offered by 12 different carriers -- and finds that being contract-free is not always a bargain.

Contract-free cell service used to be the hallmark of upstart and prepaid carriers. But with T-Mobile, A-T-and-T, and Verizon all now offering no-contract plans, Consumer Reports crunched the numbers to see if they'll save you money.

Margot Gilman of Consumer Reports said, "With no-contract deals you typically get lower monthly charges, but the plans can charge hefty price tags for the phones themselves."

Consumer Reports compared cell-phone 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 is more expensive without a contract than with one. For the family of four, the contract-free "Edge" plan costs more than 72-hundred dollars, for two years of service and four new iPhones. With a two-year contract, that same family would pay 6,540 dollars.

With A-T-and-T, the family of four would actually save by choosing the no-contract service arrangement.

T-Mobile's no-contract deal is even better for the family of four: 56-hundred dollars.

And they'll save even more if they bring their own phones. The price goes down to 3,364 dollars.

"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," said Gilman.

As for the low-use couple and the 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 Net-ten's and Straight Talk's no-contract plans. However, be aware if you don't bring your own phone, you'll have to pay full price for the phone up front.

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