Prepaid phones are mobile phones that offer a monthly service that is not based on a contract. Instead, you buy the credit and data you need, one month at a time. If you don’t want to buy a single month, you can skip it and renew the next month if you want.

Prepaid phones are just like the phones that come with contracts. Depending on what you are willing to pay for a phone, you can have something basic, or you can have the latest and greatest (and most expensive) new smartphone. Which phone you use is completely up to you.

Where prepaid phones differ from other phones is the contract. Instead of a monthly contract that you commit to for 12 or 24 or more months, you pay for your mobile service up front each month and can choose how much talk time, texts, and data you can afford.

Another important difference between prepaid phones and contract phones is how you purchase the phone. You can either get a prepaid plan from a carrier like AT&T or T-Mobile, or you can choose to buy a prepaid phone from a convenience store or large chain. Then you choose the service you want. As you will see below, there are plenty of carriers available.