Don’t rush to renew your cell phone contract

Price wars between the giant wireless phone companies is making it cheaper to talk and making the prepaid pricing model more attractive for consumers. Industry experts expect the cost for talk time to continue to drop as new low price competition enters the market.

Giants like Verizon Wireless and AT&T are lowering their various rate plans and working to get customers to commit for up to two years. But consumer advocate Clark Howard recommends people avoid signing a new contract since prices are nearly certain to drop significantly over the next year or so. As an alternative he suggests looking at the new prepaid phones from Straight Talk available at Wal-Mart. While the prepaid model has not been used widely in the U.S. it’s very popular in Europe and fits well with the new much lower prices for talk time that are coming.