While only some major carriers offer "no contract," pre-paid cellular service, almost all of them offer fixed monthly cost plans as their preferred terms of service. Pre-paid plans offer the flexibility of paying only for the minutes you actually use, but carriers make the average cost-per-minute much lower on monthly plans to drive consumers towards fixed contracts.
Fixed monthly contracts require a minimum one- or two-year commitment from the consumer to the carrier. In return, the consumer gets a lower average cost-per-minute as well as other perks often including discounted or free handsets and accessories, free nighttime and/or weekend service, and discounted add-on services including multi-line "family plans," and messaging and data plans.
Most consumers looking for new cellular service these days will opt for a fixed monthly plan. The major carriers all offer multiple plans with varying numbers of monthly minutes at different price points. When choosing a monthly plan, take the time to ask questions before signing a contract to insure that you understand all of the terms of the deal. For instance, some carriers offer free weeknight minutes beginning at 7 pm while others don't start until 9 pm. Some carriers offer free mobile-to-mobile calling within their network while others offer free calls between any mobile handsets (i.e. You can call a Verizon customer for free even though you have Cingular).
Also, be sure to find out what overage charges (when you've used more than your alloted monthly minutes) and early termination charges (when you want to cancel your service before the one- or two-year term has expired) are. There's virtually no way to sign a contract without agreeing to these charges, but some carriers make them heftier than others.
Signing a two-year contract will often get you a better deal up front on a new handset or other equipment. Some carriers will even offer a slightly better monthly rate on a two-year contract over a one-year term. While one-year contracts used to be the norm, more and more carriers are now pushing two-year contracts as fixed monthly subscribers are the bread-and-butter of their businesses.
Carriers usually offer a choice of free and discounted phones with the signing of a new service contract. Rarely do major carriers offer the newest state-of-the-art phones for free, though you will see the occasional promotion offering a hot new phone for free or close to free (generally with a two-year contract only).
Independent cellular dealers are more apt to offer top of the line phones for free or lower cost than corporate stores are. However, independent dealers do sometimes add additional charges for tax on the retail price, SIM cards, and so on which make those "free" phones wind up costing upwards of $50 - 75.
Carriers will usually offer an upgrade path to customers who have completed their initial contract term and are willing to sign a contract extension of one year or longer. Upgraded phones are rarely as inexpensive as when the same handset is purchased with a new service contract, but carriers can sometimes be talked into offering better upgrade deals if they sense a customer is ready to leave for a different carrier in order to get a good deal on a new phone. If you're in the market for a phone upgrade, be sure to check ebay and other online marketplaces as well, as deals can often be had on new and lightly used equipment.
Almost all major carriers now offer free long distance calls with fixed monthly plans. The norm nowadays is for carriers to charge for actual calling minutes, treating local and long distance calls the same so long as the calls are within the Continental United States. Some regional carriers do charge extra for long distance calls - particularly those carriers offering "unlimited local calling" under fixed monthly plans - so be sure to read the fine print if you plan to use a regional carrier to place long distance calls.
In lieu of cutting monthly fees even further, many carriers now offer unlimited nights and weekends as incentives under their fixed monthly plans. This means that any cellular calls made or received during these times won't count against your monthly allotment of minutes. Nights and weekends start and end at different times from carrier to carrier, so be sure to check your contract lest you start making "free" calls that actually eat up your minutes. Nights generally start at 7pm or later, while weekends can from Friday evening or Friday midnight until sometime Sunday night.
