Before you decide whether to go for contract smartphones or no-contract smartphones, find out the benefits of both the plans. Contract-based smartphone deals allow an individual to instantly purchase a smartphone even when he or she is not able to pay the lump sum amount of the phone at once. Therefore, these contract-based cellular plans offer the consumer an option of Equated Monthly Installments (EMIs). Network providers like Verizon, AT&T., etc offer a plan for the phone, tied to the respective provider, which allows for the price of the phone plus the cost of the cellular network of that period to be spread out over a time period of 24 months, 18 months, or 12 months.

Should you choose no contract over a contract?
It should be noted that the no-contract smartphones offered by a large number of companies like Motorola, Xiaomi, One Plus, involve a one-time payment, but the transaction is made through the manufacturer of the phone itself, thereby offering the freedom to choose from the widest range of network providers possible. While it may seem more feasible to opt for a contract based smartphone because of the installments, it also means that you will be tied down to one single plan from one single operator, where your data is capped. The contract also means that you can’t quit it. Also, since the payment plan is spread out, it will go on to be more costly in the long run.

This means, though contract based smartphone carriers provide payment convenience, there are always other operational and overhead costs that they charge from the consumer. Therefore, eventually, the cost after adding the month to month payments always comes out to be in excess of the original lump sum. Most carriers offer prioritized customer service to their contractual clients though.

However, not everyone can opt for no contract smartphones due to the obvious reason that a hefty one-time investment has to be made. For example, students and young professionals or the elderly might face a tough time paying entirely for the phone at once. So, here are the pros and cons of the two options, so that you can compare for yourself and make an informed decision.

Contract-based smartphone services
Pros

• Small, systematically broken down payment plans enabling more people to purchase the phone.
• Prioritized service for contract bound clients.

Cons

• More expensive in the long run because of added convenience and additional fees.
• Very restrictive in terms of options to choose from and inability to exit before contractual expiration.

No-contract smartphones services

Pros

• No monthly payment hassles for those who like to remain free of credit.
• More cost effective in the long run as all that is paid for is the phone and not a contract based service.
• A wide range of options to choose from and freedom to withdraw from a service at any given time.

Cons

• The one-time lump sum payment is often difficult to pay for most users.
• The other major downside is the negligent service to customers who are not bound contractually.

Overall, the contract based service offers convenience at a higher overall price, if one is ready to stick to the provider. But for those who would like to steer clear from credit and fancy having the freedom to switch between operators at a lower overall price, the no-contract smartphones are definitely the way to go.