How to pick the right phone plan in the U.S.

Picking a new phone plan in the U.S. can be difficult, particularly when there are dozens of options to choose from and it isn’t clear which one truly offers better services. Read our guide below on how to choose the right phone plan for you.

Louis DeNicola
Personal Finance Writer

How to pick the right phone plan in the U.S.

Picking a new phone plan can be difficult, particularly when there are dozens of options to choose from and it isn’t clear which one truly offers better services. Even people who have lived in the United States their whole life get frustrated by the process. 

But for most people, a cell phone is a necessity for everyday life. So, we’re breaking down what you need to know about cell phone services in the U.S. and guiding you through finding a new phone plan. 

What you need to know about phone service in the U.S.

We’re not going to recommend a specific phone plan because the best options are going to depend on where you live, how you use your phone, and how much you can afford. However, there are a few general things you’ll want to know before looking:

  • AT&T, T-Mobile, and Verizon are the three major carriers. Most people have a cell phone plan with one of these three companies. You may also hear or read about Sprint, which was a fourth major carrier before T-Mobile bought the company in 2020.

  • There are also many smaller carriers. You can also get cell phone service from one of the many mobile virtual network operators (MVNOs), such as Cricket Wireless, Consumer Cellular, Google Fi and Mint Mobile. These companies purchase coverage at wholesale rates from the major carriers and then create and sell their own cell phone plans. The plans are often less expensive than what you can find from a major carrier, but they may include fewer extras. 

  • There are prepaid and postpaid plans. Major carriers and MVNOs may offer prepaid and postpaid plans, which means you’ll pay the bill at the beginning or end of receiving the month’s services, respectively. Prepaid plans tend to be cheaper, but they also may have fewer perks and less high-speed data. However, postpaid plans may require a credit check and a security deposit if you don’t have good credit. 

  • Your U.S. credit history can impact your options. In addition to impacting your eligibility for a postpaid plan, having good credit in the U.S. might be important if you want to finance a new phone.

With the big picture in mind, here’s what you can do to pick a cell phone plan. 

5 steps for picking the right plan

With the big picture in mind, you can start taking a closer look at specific cell phone plans. These five steps can help you narrow in on the best option: 

1. Compare coverage options

You want to make sure your phone will work when you need it. Consider where you spend most of your time and which of the carriers will offer the best coverage. 

Many carriers have coverage maps that you can use to see the coverage at specific addresses or areas. However, these might not be detailed enough to tell you how the coverage is at your house or in different parts of your school or work. Asking friends and colleagues for recommendations could give you more insight into the pros and cons of different carriers. 

If you’re looking into MVNOs, remember that the MVNOs purchase access to coverage from the major carrier. Some work with a single carrier while others have agreements with multiple carriers and switch your connection to help you get the best coverage. But regardless of the potential coverage area, the major carriers may prioritize their customers’ connections over the MVNOs’ customers. 

2. Consider whether you want a new phone

If you have a phone that you want to keep using, be sure to check with the carriers you’re considering to ensure your phone will be compatible with their service. 

You won’t have these restrictions if you buy a new phone, but the latest models can be expensive. Some carriers offer deals and 0% finance on phones to new customers, but these offers generally require good credit. Another option may be to use buy-now-pay-later (BNPL) financing to pay for the phone over time. 

Also, see if you can use credit that you established in your home country to get a phone and phone plan in the U.S. through Nova Credit's latest partnership with Verizon. You may be able to qualify for a postpaid plan and 0% interest payment plans, which could let you get a brand-new phone with $0 down payment and then pay it off over 36 months with your monthly phone plan’s bill. 

3. Figure out how many lines and how much data you need

A new phone plan’s cost is going to depend, in part, on how many lines you’re buying and how much data you’ll use—many plans include unlimited talking and text messages within the U.S. Joining or creating a family plan could help everyone save money, and the plans generally aren’t restricted to family members. 

Figuring out how much data you’ll use can be tricky if you’ve recently moved because your previous usage might not align with today’s needs. But you can try to check your phone's previous data usage to get a rough approximation. 

You could start with a lower-priced unlimited plan and upgrade later if you need more high-speed or “premium” data. You also may be able to save money by signing up for a limited-data plan, assuming you don’t hit the cap and want to pay for extra. 

4. Check what the plans actually offer

After narrowing in the top-choice carriers and the type of plan you’ll need, you may find there are a few clear winners. But first, there’s some fine print and features you’ll want to watch out for:

  • “Unlimited” data. Many carriers offer plans with unlimited data but limit how much high-speed data you get each month and throttle (i.e., decrease) your data speeds if there's a lot of network activity and you don’t have a higher-priced plan. 

  • Mobile hotspot access. There may be different data limitations if you want to use your phone as a hotspot to connect a laptop, computer or tablet. Some plans might not allow tethering at all. 

  • No-contract options. Many plans, including postpaid options, don’t require a long-term contract. But if you’re considering signing a contract, look into what you’ll need to do to get out of it early. 

  • International coverage. See how much it’ll cost if you plan on calling your home country using the plan.  

  • Extra features. Some phone plans come with streaming subscriptions for services like Disney+, Hulu, Netflix,HBO Max or Stadia Pro. These are generally postpaid plans, and they may save you money if you’d pay for these subscriptions anyway.

Looking up all the fine print can be difficult and take a long time, especially when carriers have multiple plans and each has its own features and limitations. If you’re feeling overwhelmed, just focus on what’s most important to you.

5. Compare the total cost

For most people, cost is one of the main factors in choosing a phone plan. To find the best cost-to-value plan for you, consider the potential savings that could come from extra features and how much you may have to pay if you go over a plan’s data limit—especially if you’re on a family plan with someone who uses a lot of data.

Also, watch out for the variety of fees and taxes that could be added to your bill. A Tax Foundation study found that a household with four phones on a family plan typically paid about $25 a month in taxes, fees and government surcharges in 2020. 

Some carriers will advertise the total price with these extra costs, while others may only advertise the base price. Make sure you compare the total costs before signing up.

If you’ve recently moved to the U.S., and have credit in your home country, Nova Credit's partnership with Verizon enables you to use your international credit history to apply for 5G Unlimited plans and, with approved credit, 0% interest on device financing for up to 36 months. No U.S. credit history needed.