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Cell phone Plans in USA – Post paid vs. Prepaid Plans. Which one to Buy ?

One of the most important things for anyone in America is having a cell phone. It can be a challenge to live in US without a cell phone. One of the things that internationals need to figure out is the best cell phone plan to get. If you get the wrong plan, you may regret it for a long time…The concept of minutes, incoming are different in America and not necessarily same as you would think in your home country. Let me share some of my thoughts.

Prepaid cell phone Plans in US :

People assume many things based on their experience of having a prepaid in their home country. Though prepaid seems simple and easy on the surface, it is not as economical or beneficial.  In countries like India, if you get a Prepaid cell phone plan, you get incoming for free. The amount you pay is converted to what you get as talk time in minutes and they are only charged as outgoing minutes.  But, this is different in America. Incoming is NOT free in America unless it says so…for most of the prepaid plans, incoming is NOT free. When you buy a plan from a cell phone service provider in US, you get minutes and the trick is, the minutes are charged for outgoing as well as incoming.  There is nothing like free incoming concept. It is not the best bang for the buck. You do get any advantages like talking for free over weekends etc.  Unless you buy  a premium prepaid plan over $40 or more.  The best thing about prepaid is, there is no credit check, you just walk into store and buy the phone. The charge per minute can vary from 10 cents to 25 cents. There are plans that also say that, you get charged on the day you use with a daily fee, but you get more minutes, etc. Also, now in the recent times, with smartphone, we have many plans that are Data Centric like how much data you get per month or unlimited.Overall, I do not think prepaid is a good investment if you plan to stay in US for over 6 months.

Post paid Cell phone plans in America :

Post paid cell phone plans may not be very common in your home country. But in America, Post paid cell phone plan is the way to go if you plan to live here for over 6 months.  Each post paid plan comes with fixed day time minutes. What it means is, you will charged for incoming as well as outgoing from the minutes that were allotted for day time per month.  For instance, the plan would say 800 day time minutes. It means that you only have 800 minutes for incoming as well as outgoing in that month during day time. Typically 6 AM to 9 PM is considered as day time. Most of them will have feature like, free mobile to mobile calling, that means you talk for free with someone on the say network. The good things with post paid plan are, you can talk as much as you want after 9 PM with your friends and family and also you talk unlimited on weekends depending on plan you choose. Again reminding, incoming is NOT free unless it is specified in plan. The biggest deal with Post paid plan is, they will do a credit check, that checks your credit history. Unless you have built good credit history, you may not be approved. You may have to pay premium like $200 or $500 depending on the provider (you may  be refunded after year or so this amount). The reality is, you will not be approved for post paid cell phone plan if you have just come to US for education or job.  You may have to find one of your friends to buy a cell phone on their name, if you do not want to pay that premium upfront. I had 5 cell phones on my name at one point, all of them were for my friends.

Which Cell phone plan to buy in US ? Prepaid or Post paid ?

If you are going to live in US for more than 6 months, then just buy post paid plan. It is totally worth it. You may get a decent plan for $45 to $50. If you are here for just a month or so, then you may just buy the prepaid plan. The best prepaid unlimited plan comes for around $60 dollars that gives you most of the benefits of post paid plans. It is okay to pay some premium if you are here for just a month.  Though post paid seems difficult to get and expensive in beginning, it is the best plan to buy if you are going to live here for over 6 months.  You just need to find a friend or relative like me who can buy one for you 🙂

I tried to cover the basics of cell phone plans. Hope you got an idea and you will make an educated decision in buying your cell phone after you land in US.

Image Credit : http://img.slate.com/media/1/123125/2134390/2135170/2138875/060415_UndEcon_PhonePlansTN.jpg


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  1. Thanks !
    To summarize, If you are going for more than 6 Months , Go for Postpaid but if one is new USA , it is difficult to get Postpaid connection <> so get help of Seniors to buy for you 🙂 Thanks again 😀

  2. You may also go for Family Mobile Plan, 2 lines for $96 per month, unlimited talk, unlimited message, unlimited web with no commitment period.

  3. Hi,

    I am travelling to the US for a period of three weeks and would opt for a pre-paid plan. Do I get a cell phone free with the plan? Or do I purchase one separately? Although I have a Blackberry, I am not going to use it in the US. Can I carry a cell phone from here? If incoming calls (as per your article are charged too), what kind of plan is best suited for a period of three weeks usage.


  4. Hi

    I was wondering if I am going to visit Florida for 10 days then would it be possible to take a new prepaid connection with a iPhone? and if I come back then can I carry that for next time visit…and during stay in India can I unlock the iPhone as well so that I can use that here too… I have hard that apple use to Unlock the iPhone @ 15$….

    • Prepaid connection is not available on locked iPhones. Also, Apple doesn’t unlock the iPhone. Usually these are 3rd parties that jailbreak and unlock the iPhone.

  5. Hi Kumar,
    Your insights and suggestions for Indians going to/staying in US are simply awesome. I really dont think you have missed out on covering anything !! I am coming to US for my PhD this fall and am using your blog as the bible to survival in US 🙂 I had heard from someone that getting into contract with any company is not feasible when it comes to cell phones. I was wrong I see!! Reading this article as well as DD’s comments, I really want to get a cell phone in US now. As I will be going for PhD I will be there for a minimum of 5 years, so a post paid plan would be good plus I can get good handsets at reduced prices. The idea of getting it in a senior’s name though sounds simple enough, what if the senior moves away/ comes back to India before the contract term is up? If I want to avoid this whole issue of getting it in someone else’s name, what do I do? Could you please help me out in deciding what to do? Can I get a prepaid connection till I build a good credit history and then shift to post paid…. how long will that take if I maintain 1 card only and use it as u have advised in the building good credit article?

    • To build credit in US, one needs a social security number, and I don’t think they give out SSN to international students unless they have work authorization. As you will be here on PhD, you may be planning to work as a RA/TA and that should allow you to get the SSN.

      So it may be a good idea to have prepaid phone until you have a SSN. If you are going for prepaid plan, its better to buy a used handset from secondary market like craigslist or ebay. Once you get into post paid plan, you can get a new handset for free (not iphone but many of the Android based phones). So don’t spend money upfront on the handset when on prepaid plan.

      As for credit card, there are sites like http://www.creditcards.com that allow you to compare different CCs. The one which I used (when I was just starting off w/ my credit history) was Capital One. They don’t have annual fees, but have high APR and low credit limit (but it shouldn’t matter as long as you plan to remain current on payments). You can also go for secured credit cards which are linked to your bank accounts.

      Within 6 months, you should start seeing significant improvement in your credit history.

  6. I already have an high end mobile in India and it supports quad-band. So initially I thought of getting prepaid SIM in US. But after looking at this post, I decided to go for Post paid.
    If I choose any postpaid plan, can I still use it with my mobile instead of getting a new one in US?

    • Kishore, the reality is if you get a post paid plan in US, you get a free phone with plan. So, just get the free phone why do you want to use the old phone? If you still want to use the old phone, you can do that as well.

  7. I would like to add:
    Do NOT purchase handsets from your home country. When you choose a particular plan, you get to choose which cellphone handset you want along with the plan. Some basic handset models come free if you enroll in a plan. For some other fancy/extra-features handsets, you might have to pay a little extra, depending on which handset you opt for. But it is still cheaper than purchasing the handset from your home country.
    For the duration of the plan (usually 2 years), the company owns the handset, for legal purposes and you may have to return the handset if you terminate your plan. But after 2 years, you get to keep the handset permanently, even if you change your plan.
    Bottom line: Do NOT get handset from home country – get a handset in the US – it is much cheaper (maybe, free)!

    • Very good point DD ! In fact, for few of my friends, the handsets did not work for some reason with some cell phone providers.


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