YOU'RE STILL GETTING RIPPED OFF:

Paying for cellphone services as you go: Staying connected without a contract can be a money saver for the right kind of user, though some extras may not be available.(Kathy M. Kristof, 2/21/10, LA Times)

With a standard plan, you sign a contract in which you agree to maintain your service for a set amount of time -- most commonly two years -- at a set price. In exchange, you usually get unlimited calling and receive a phone free or at a deeply discounted price.

You are effectively paying for the phone over time through monthly service fees that are slightly padded to account for the phone's cost. If you cancel before the contract term is up, you'll pay a fee that can range from $50 to $400, depending on the plan, when you canceled and the phone you bought.

With a pay-as-you-go plan -- also called a prepaid plan -- everything is a la carte. First you buy your own phone upfront, making sure it's compatible with your chosen provider's service.

Then you can buy a month's worth of phone connection services, a set number of minutes (that will last for a month or longer), Internet access, text messaging or a bundle of these services.

You can choose to be billed by the minute/text or choose a plan that gives you a set number of days (usually 30) for a set rate. If you don't like the service -- or find yourself too strapped to pay for it -- you don't have to continue after your minutes are used up.

That's particularly attractive for people who need basic service on the cheap, perhaps because they're unemployed and looking for work, Naji said. PlatinumTel, for example, has a limited service plan for as little as $10 a month. Add in $40 or so for a basic phone and you're spending $160 for the year.

Here's a TracFone with double minutes that would cost you $80 for a year:

Posted by Orrin Judd at February 21, 2010 9:14 AM