Consumer Reports: Cell phone service plans without a contract

NEW YORK (WABC) -- Contract-free cell phone service used to be the hallmark of upstart and prepaid carriers.

But with T-Mobile, AT&T, and Verizon all now offering no-contract plans, Consumer Reports crunched the numbers to see if they'll save you money and found that you need to do your homework before signing up.

"With no-contract deals you typically get lower monthly charges, but the plans can charge hefty price tags for the phones themselves," said Margot Gilman of Consumer Reports.

Consumer Reports compared cell-phone plans for three types of people: an average, single-user; a low-use couple; and a high-use family of four.

In all cases, Verizon is more expensive without a contract than with one. For the family of four, the contract-free "Edge" plan costs more than $7200, for two years of service and four new iPhones.

With a two-year contract, that same family would pay $6540.

With AT&T, the family of four would actually save by choosing the no-contract service arrangement.

T-Mobile's no-contract deal is even better for the family of four: $5600.

And they'll save even more if they bring their own phones. The price goes down to $3,364.

"Your phone has to be compatible with the new network, and you'll need to switch out the phone's SIM card for a new one, but that can cost little or nothing," said Gilman.

As for the low-use couple and the individual user, Consumer Reports says Consumer Cellular's no-contract service, with installment payments for the phones, is the best deal.

Consumer Reports says for individuals, other deals worth checking are Net-ten's and Straight Talk's no-contract plans. However, be aware if you don't bring your own phone, you'll have to pay full price for the phone up front.