When I used to sell wireless phones for a retailer 7+ years ago, the only people who got prepaid phones were people with bad credit. Sure there was the occasional customer who wanted prepaid in case of an emergency, but overwhelmingly it was the case of not qualifying for the "free phone with plan" contracts.
Pre-paid services have gotten a lot better these day. Many just choose to go prepaid, especially when carriers like Virgin Mobile, Verizon, and ATT goPhone offer pretty competitive rates on per minute usage and text messaging.
The phone models offered are also pretty "cool" and attractive. No more discontinued gray Nokias! I have friends who simply buy whatever phone they want and just add $20 in airtime as needed. With light usage, it beats paying $40-60 a month and termination fees.
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