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A pay as you go phone is a cellphone that is linked to a pay as you go plan, in which people pay for services as they need them. These types of plans can be very flexible, and for certain people, they can be extremely convenient. Many major cell service providers offer both contract and pay as you go plans to their customers, and smaller regional providers may offer only pay as you go service, with no option for a contract at all.
To use a pay as you go phone, a consumer purchases the phone and then buys minutes for it. The phone may be locked, in which case it can only be used with a particular carrier, or unlocked, allowing the consumer to buy minutes with any carrier. A phone number is assigned to the phone, and the consumer can use it until he or she runs out of paid minutes, at which point more can be purchased.
Minutes with this type of plan do not expire, unlike in a contract, where people have a minute allowance for the month. This can be great for someone who only uses a phone rarely, as he or she can buy a large amount of minutes and use them at leisure. The drawback is that the per-minute charge is often higher with a pay as you plan than it is with a contract, and there may be extra fees for texts and data. Extra perks like free nights and weekends are also not usually available.
These types of phones are sometimes referred to as “disposable,” because they do not come with the burden of a contract. They also do not require that the consumer have good credit, a credit card, or even an identity. Pay as you go kiosks offer phones and minutes for cash, for people who like to retain anonymity, or people who do not have credit cards.
For people who are considering the purchase of a phone or a new phone plan, a pay as you go phone is certainly an option. Per-minute charges are often the biggest concern; someone who talks on the phone a lot may get a better deal with a contract, and contracts often come with free phones as an incentive for signing up. Issues like texting, picture messaging, and the ability to send and receive data should also be considered.
One highly useful application for pay as you go phones is teenagers and children. Kids tend to run up their phone bills, since they are not aware of the cost of phone service. With pay as you go, the phone will simply stop working once a minute allowance has been reached; a contract phone, on the other hand, will happily complete calls at a higher per-minute rate after the contractual minutes are up, and then send a huge bill in the following month. Parents can use the phone to avoid huge bills, and suggest that their children get jobs or do extra chores for extra minutes.