There needs to be a 3rd option, because I have both. I have a contract and I also have a pre-paid that I use for my mom. I have the contract for me from when I worked. I had 1,000 anytime minutes and I would use up almost every month, now I have over 10,000 rollover minutes. I hate to give up my contract because its grandfathered in and you can't beat the price! My mom barely uses her phone, but I like to have her keep it for when she is gone and when her home phone is out.