A Guide to Getting — and Using — an iPhone for Cheap

Cell Phones, Utilities
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Woman with an iPhone

It’s hard to imagine life without an iPhone anymore. People use them to organize their entire lives, from calendars to email to entertainment. That’s great — for those who can afford it.

An iPhone 5C costs around $550 without a contract. Customers can defray some of that cost with a two-year contract with one of the major carriers, or they can break it up with a payment plan, but those options present their own problems. The vast majority (93%) of iPhone users spend $51 or more on their monthly bills, and almost half (48%) pay between $101 and $200 for their plans, according to a report by the Consumer Intelligence Research Partners. And with a payment plan, customers still pay full price for the device. For those who can’t afford it or don’t want to be tied to a contract, prepaid plans might be the best option.

We’ll break down the plan options for those in the market for an iPhone and choose the best one.

Two-year contract

While signing up for a two-year contract may save money on the device, it could end up costing much more in the long run. Changing devices partway through a contract means paying full price for the new device, and cancelling early means big fees. Besides that, contract plans are not cheap. For an iPhone 5C, a plan with unlimited talk and text and 1GB of data from Verizon Wireless costs $80 per month, plus $99.99 for the phone. AT&T charges $85 for the plan (with 2GB of data) and $99.99 for the phone, and Sprint charges $70 for the plan and nothing for the phone. T-Mobile has no contracts.

Finance plan

The four major carriers offer payment plans for eligible customers, but those consumers still end up paying the full price for their devices, just over a longer period of time. And early cancellation means that the customer has to pay the remaining balance for the device in full, in addition to other cancellation costs. The same plan outlined above with rolled-in payments for the phone costs $102.91 per month for 24 months with Verizon Edge ($2,469.84 total) and $86.15 for 26 months with AT&T Next ($2,239.90 total). While T-Mobile has no contracts, you are essentially locked into a contract when you choose the payment plan, and an unlimited talk and text plan with 2.5GB of data costs $87 per month for 24 months ($2,088 total). Sprint offers Easy Pay plans only at select stores.

Major-carrier prepaid

The four major carriers also offer prepaid phone plans for those who can’t or don’t want to commit to a two-year contract. While these tend to be cheaper than contract plans, for the most part, it isn’t by much. It appears the exception is with Verizon, since it offers a discounted phone with its prepaid plan, but with its limited data plan, users will end up spending more for data anyway. While AT&T is a little better on the data front, it remains limited. Sprint As You Go is relatively inexpensive with unlimited data, but Sprint’s network is notoriously spotty, and even without data-throttling, users complain about slow Internet speed.

» MORE: Best prepaid plans

T-Mobile’s prepaid options are impressive, though they do come with a higher price tag. All four have pretty limited options for buying a prepaid iPhone, but with Verizon, AT&T and T-Mobile, customers can bring their own phones, so they can find what they want on Amazon or eBay and use that. With the most flexibility and no added costs for data, T-Mobile has the best prepaid plan of the major carriers.

Prepaid-specific carriers

A better option for prepaid, though, is going through a company that specializes in just that. Plans through Boost Mobile, Cricket, Virgin Mobile and Straight Talk Wireless are less expensive than any of the major providers’ options.

Boost, Virgin and Straight Talk also offer lots of flexibility, with several iPhones to choose from and many plan options. Cricket is less flexible since it offers iPhone prepaid plans only in certain areas, and customers cannot bring their own phones. Virgin doesn’t let customers bring their own phones, either, but with the lowest cost of all the carriers and just about any iPhone you might want available through them, it’s still a great option. The one major downside to these companies is the limited coverage area (excluding Straight Talk), but since they tend to be regional, customers can likely find a prepaid provider in their area with just what they need.

» MORE: Learn about MVNOs and how they can save you money

Of all the options presented here, Virgin Mobile is the best choice for most customers. It has the lowest price tag, but that doesn’t seem to take away from its usability and flexibility.

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