Prepaid Cell Phones Are New Frugal Chic

Pay-as-you-go replaces contracts as consumers cut spending
By Amelia Atlas,  Newser Staff
Posted Feb 22, 2009 7:18 AM CST

More customers are turning to Tony Soprano-style, pay-as-you-go cell phones, and not just to avoid wiretaps. As the recession forces consumers to cut costs, all-inclusive prepaid plans are the new frugal option, reports the New York Times. "In today’s economy, it’s not cool to pay $120 a month for a phone. It’s a waste of money," said one purchaser.

Contracts typically run in two varieties: pay-as-you-go phone cards and prepaid, flat-rate contracts. While cell phone carriers tend to prefer long-term contracts, they are increasingly turning to prepaid phones as a growth area in the saturated wireless market. Even without discounts on the actual phones, the savings are considerable. "Every dollar I save goes toward something else," said one user, who estimated he saves $40 a month. (More cell phone industry stories.)

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