Just a few years ago, buying a cellphone without a contract was both unfashionable and largely unfeasible. No-contract options were available but getting your hands on the latest phones and the best data plans usually required a two-year contract.

But no-contract plans have been on the rise, especially since March, when T-Mobile abolished annual service contracts from its lineup. Now, the no-contract options are so plentiful and varied that you might want to consider one, especially if your current phone is outside the contract period.

There are two big questions to think about before making the switch. Can I save money? And, will I receive the same level of service? The answer to both can be yes, though it depends on your particular circumstances and on doing your research before making any move.

Making It Pay

In traditional two-year plans, carriers often use a practice called subsidizing. Knowing that you will be locked in, they lower the phone’s price to entice you to agree to a contract. They may, for example, offer an iPhone for $200 instead of the $600 or more that the device costs at full price. The carriers then earn a profit over time from whatever talk, text and data plan you have chosen. And if you decide to leave the plan early they can recoup at least some of the subsidy by collecting an early-termination fee.