In general, prepaid phone plans offer significant savings over plans with contracts, so comparing prepaid rates among major carriers can lead to significant savings. However, these plans require users to pay for their phones outright, which requires a larger upfront investment.
While plans with contracts subsidize the initial purchase of the phone, calculating the overall cost shows that the total money spent on the plan exceeds that of prepaid plans. By purchasing an older version of a phone, like the iPhone 5, buyers can reduce this initial cost; in some cases, the cost of the used phone may even be less than the cost of a subsidized new phone. When shopping for prepaid plans, it's worth looking at smaller providers or subsidiary brands. Metro PCS, for example, is owned by T-Mobile and uses its lines. Cricket Wireless is owned by AT&T.
Buyers looking for phones online need to ensure that the devices they buy are compatible with the network they intend to use. The iPhone 5 phones designed for Verizon won't work on AT&T plans, and even providers that operate on GSM might not use the same frequencies. Phones also need to be unlocked before they can switch between different providers. While unlocked iPhones are available, they tend to cost more than branded models.