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Saving Money With Prepaid Smartphones

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MIAMI (CBS4) – Love your smartphone, but hate the bill? You may want to consider signing up for prepaid wireless because even the most popular smartphones are available for prepaid users. So it may be worth considering if you’d like to shave some bucks on your cell plan.

Saving money is important when you have six kids and that’s why Tiffany Wong switched to a prepaid wireless smartphone.

“If I can get the same service for less than half the money, I’m going for it,” said Tiffany.

Tiffany got a prepaid droid which includes: unlimited texting, internet and phone calls for forty-dollars a month.

Her old “contract based carrier” bill was about one hundred dollars a month for the same services and benefits. The sixty dollars a month savings was such a good deal, she got her son Ryan a prepaid smartphone too, which he uses to surf the web.

“Since there’s eight people in my family, someone’s almost always using the computer,” said Ryan.

We found the prepaid smartphone market is ringing off the hook. Sales more than tripled over the past year. Customers ditching those annual contracts are now one of the fastest growing smartphone segments in the U.S.

With prepaid mobile you don’t make any contract commitments to one carrier, and you pay a set flat monthly fee upfront. That eliminates any surprise overage charges, which may come in handy with tweens.

“You wouldn’t want to give them a high end smartphone with an expensive post paid plan where they might get overages on and blow out your family budget,” said John Breyault with the National Consumers League.

The latest news in the prepaid market involves the iPhone.

Virgin Mobile and Leap-Cricket are now offering prepaid iPhone service.

T-Mobile says if you currently have an iPhone, ask your carrier to unlock it, bring it to their store, they’ll pop in a new SIM card and you can get inexpensive prepaid service.

“Often those customers find even with a penalty to cancel a contract they’re able to save money by switching,” according to T-Mobile’s Larry Petrone.

Some drawbacks to having contract-free cell service? If you want a smartphone, you’ll pay the entire retail cost of the device, which can be more than five hundred dollars in some cases. Also very few prepaid family plans are available, so you really need to figure out the savings for your household.

“You have to incorporate the higher upfront cost of the device itself versus the cost of keeping, adding another line to your family plan,” explained Breyault.

Even though Tiffany had to pay full price for two new smartphones, she says she’s still coming out ahead.

One analyst says right now the prepaid market is primarily younger, less affluent users, who are “highly mobile” and “live” on their smartphones.

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