Saving With No-Contract Phones; No Charge to Leave - KTVN Channel 2 - Reno Tahoe News Weather, Video -

Saving With No-Contract Phones; No Charge to Leave

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Jake Durkee is looking for a new mobile phone plan that doesn't lock him in to a new contract. "It's all about flexibility. I mean if you have an option to try before you're committed, why wouldn't you do something like that?"

LA Times consumer columnist David Lazarus says no contract plans give consumers an advantage. "The wireless companies have to compete more aggressively for your business. And that means they have to offer lower prices, faster speeds, greater reliability, or you are going to leave."

Traditional contract plans offer new phones for far less than retail. Some are even free. The rest of the cost is built into a customer's monthly bill. No contract plan users pay full price - but there's no charge to leave. "Once you've paid off your phone, the cost of service goes down."

T-Mobile launched the trend. Companies like Verizon and AT&T have followed, offering their own 'no-contract' plans. And they are getting a great reception from consumers.

"I'd rather pay up front to not have any obligations, get the phone I want, and be able to kind of do as I please after I've paid it off."

40 percent of AT&T's new smartphone customers, about 1.1 million people, have already signed up for their no-contract plans in the last three months.
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