Best Cell-Phone Plans for Every Type of User

Call it the wireless wars. Cell phone carriers are falling all over themselves in their rush to entice you with their latest promotions, which range from overhauled plans and pricing to hefty cash rebates if you're willing to break your contract with your current carrier. In a span of a couple of weeks in August, most of the major carriers either updated some of their current plans or introduced new plans to compete more aggressively for your business. "I think it's a better time now than it ever has been for customers looking for deals," says Logan Abbott, president of Wirefly, a site that compares phone plans.

Intense competition has wrought a much wider selection of no-contract options with lower-price service plans. T-Mobile led the charge in spring 2013 by discontinuing two-year contracts on all of its plans. Its customers can bring their own compatible devices or pay full freight for their phones rather than select a device at a subsidized price that carriers typically pair with a contract. Now AT&T, Sprint and Verizonalso allow customers to pay the full price for a phone or bring their own devices in exchange for lower pricing on a service plan and freedom from a contract.

You'll have to do the math to see whether one of the new arrangements is a better deal than a traditional two-year contract. For example, suppose a couple want to share 4 gigabytes of data on Verizon's More Everything plan and get new Samsung Galaxy S5 phones. If they skip the contract, they'll fork over $600 each for the phones but pay lower monthly service fees than with the contract. Total cost:$4,320 over two years, including the phones. If they opt for a shared contract, they'll pay $100 each for the phones and slightly higher monthly fees, for a total of $3,800 after two years--but they may have to fork over as much as $350 per line if they break the contract within two years.

It's a plus for customers that carriers are cutting breaks on monthly service fees. But the latest smartphones cost a lot more than basic flip phones, and phone and plan prices overall have risen over the years to reflect the higher cost of providing sophisticated gadgets and data services. Now, "the phone industry is looking a lot more like the car industry," says Maggie Reardon, author of CNET.com's "Ask Maggie" column. As with a car lease, you can choose to make monthly payments on a phone and trade it in for a new one after you've paid off a certain portion. Plus, carriers are pushing insurance plans to cover the devices.

And sticking with a contract may mean you'll have to wait longer to get a new phone at a discount. Earlier this year, AT&T and Verizon began requiring contract customers to wait a full two years, rather than the previous 20 months, to purchase a subsidized phone when they renew.

The whirl of changes can leave even the savviest customer feeling confused. So to help cut through the clutter, we picked outstanding plans that match your usage profile and priorities. Keep in mind that the best plan for you may hinge on which carriers provide good coverage in your area.

Families

Best plan: Verizon Wireless More Everything

When several people share a wireless plan, strong overall coverage is crucial--especially if family members are scattered across the country or travel frequently. That's where Verizon excels: In a recent report from RootMetrics, a company that evaluates wireless coverage, Verizon dominated in tests of network performance.

The More Everything plan isn't the lowest-priced plan on the market, but it has become more flexible. The plan provides unlimited voice minutes and texts, and it lets you choose how much data family members share. A family of four smartphone users on a two-year contract would pay $260 a month (all prices exclude taxes and fees) to share 10 gigabytes of data--which may be a good allotment if Mom and Dad go light on Web surfing but the kids gobble data with videos and music. Verizon says that its customers use an average of 1 to 2 gigabytes of data per device each month.

New customers who pay full price for phones from Verizon or who bring their own phones don't sign a contract, and the monthly service charge is only $160 for the same plan. You could give the kids your old phones or buy phones on eBay to save money.

Runner-up: T-Mobile Simple Choice If low prices are your priority, consider this plan. A family of four would pay only $140 per month for unlimited talk and texts and 3GB of full-speed data per person (after you surpass that amount, T-Mobile slows speeds but doesn't levy an additional charge). You can bring your own compatible devices or buy them from T-Mobile at full price (and spread the cost over 24 monthly payments, if you prefer). Recently, a 16GB iPhone 5s was $600 up front or $25 per month for qualified customers, plus a $10 fee for a T-Mobile SIM card.

Light users

Best plan: T-Mobile Pay As You Go

T-Mobile's plan is simple and flexible. Each month, you prepay for a minimum of $3 worth of combined voice minutes and text messages (one minute is worth 10 cents, and so is each message). If necessary, you can add more value from your credit card, a checking account or a T-Mobile refill card. Plus, you can buy data packages as you need them. A seven-day pass to use 1GB of data is $10. Choose among any of the phones in T-Mobile's lineup or bring your own compatible device.

Runner-up: Virgin Mobile PayLo Virgin has several plans to choose from, depending on how many minutes and text messages you use and how much data you want. The lowest-priced plan, at $20 a month, comes with 400 minutes. Text messages are 15 cents each, and Web access is $1.50 per megabyte. For $30 per month, you'll get 1,500 minutes and 1,500 text messages, plus 30MB of data. Virgin Mobileoperates on the Sprint network. You get to choose from a selection of basic phones; a Samsung Montage, for example, was recently $40.

Data hogs

Best plan: T-Mobile Simple Choice

If you burn through data each month--say, because you stream a lot of music or videos on your mobile device--an unlimited-data plan will give you peace of mind that you won't exceed your allotment and rack up big charges. The Simple Choice plan with unlimited data runs $80 a month for a single user. It includes truly unlimited, speedy 4G LTE data (it won't be slowed after you hit a certain threshold), as well as 5GB of data when you use your smartphone as a mobile hot spot. Voice minutes and text messages are unlimited, too. If you mainly stream music instead of videos, you may be able to get away with a lower-level plan. With T-Mobile's other individual Simple Choice plans ($50 to $70 a month, depending on how much high-speed data you want), you can stream as much music as you like from services such as Pandora and iHeartRadio and it won't count toward your data limit.

Runner-up: Sprint $60 Unlimited Plan Sprint has reworked its unlimited-data plan, and its new offering beats T-Mobile's price by $20 a month. The Sprint plan comes with unlimited talk, texts and data, and customers who use it must pay full price for a phone or bring a compatible device. Unfortunately, customers in some areas have dealt with poor service quality as Sprint upgrades its network, and the company has been slower to roll out speedy 4G LTE data than its competitors. Still, Sprint is building a better network. If coverage is solid in your area, it's a worthwhile deal.

Bargain hunters

Best plan: Straight Talk Unlimited/Month

If you want a great deal on a plan that includes plenty of minutes, text messages and data, look beyond the major carriers. What smaller companies lack in brick-and-mortar stores and access to the latest technology, they make up for in price. For $45 a month, the Straight Talk prepaid plan provides unlimited talk, texts and data (speeds are reduced after you surpass 3GB of data usage in a month). Straight Talk offers a selection of smartphones, including the iPhone (the 16GB iPhone 5s was recently $550), or you can activate your own compatible device. Your network coverage depends on which networks work with the device you choose.

Runner-up: Republic + 4G To keep plan prices down, Republic Wireless employs an unusual strategy: It uses both Wi-Fi and standard cellular coverage to provide voice, text and data services. When you're in an area with Wi-Fi access, your phone uses it. When Wi-Fi isn't available, Republic Wireless relies on Sprint's network. The $40-a-month plan includes unlimited talk and texts as well as unlimited data over a 4G connection (speeds may be slowed if you use more than 5GB in a month). For $25 a month, you can get the same services but with a 3G network. Republic offers only two smartphones, but they are good models for the price: the $149 Android Moto G smartphone and the $299 16GB Moto X (you must use the Moto X to get 4G service). Or customize a Moto X starting at $350.

Early adopters

Best plan: T-Mobile Jump

With this early-upgrade plan, you can get a new phone anytime you want as long as you pay off 50% of the phone's full price (T-Mobile divides the price into 24 monthly installments). If you want out of the program, you can pay the full price of the phone and keep it. You have to pay a $10 monthly fee to enroll in the Jump program, which includes insurance coverage on your phone and security software.

Runner-up: AT&T Next AT&T lets you pay for your phone over 20 or 24 monthly installments. If you choose the 20-month option, you can trade in your phone and upgrade to a new one after 12 months; the 24-month option allows you to trade in your phone at 18 months. You can upgrade earlier, as long as you've paid two monthly installments. At that point, pay off the balance on your agreement and you'll be eligible to trade up. If you decide you want to keep the phone, you'll pay full price.

Devour less data

Try a few free tricks to keep data consumption on your mobile devices at a minimum. The Opera Mini mobile browser (compatible with most smartphones) shrinks the amount of data you need to open Web pages by up to 90%, meaning sites may load more quickly, too. The browser has a clean interface and is easy to use. The Opera Max app (available in beta testing for Android devices) compresses pictures and videos that you view on your device so that they require less data--but you might notice a deterioration in image quality.

The more widely available Onavo Extend app (Android, iPad and iPhone) compresses data while you're online to lower your consumption, though it doesn't squeeze streaming video. The Onavo Count app (Android, iPad and iPhone) monitors total data usage as well as the amount of data each app is using. Your wireless carrier may also provide an app that tracks how much data you're burning overall. The best way to save on data usage: Hook up to secure Wi-Fi connections when they're available. In your phone's settings, make sure Wi-Fi capabilities are switched on.

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Lisa Gerstner is Associate Editor of Kiplinger's Personal Finance.