How does a sim card work? I need to know the basics?

Basically, I have an iPhone 4 but the monthly plans are extremely expensive for any iPhone 4 and they all come with a 3 or 2 years term agreement, which is really frustrating. I find myself to already own an iPhone 4. What I wondered is, can I get a plan on a sim card compatible with iPhone 4 that is decent and that doesn't cost much more higher than 35$ a month? I'm from Canada so basically, I do not have Verizon, Sprint or anything like that. (More specifically living in Quebec)

The first question is… Which carrier was your iPhone 4 first registered on? As it makes a huge difference. Are you sure it's a regular 4 (GSM), and not the 4 CDMA version?

Second, are you sure it's clean, i.e. You don't owe any money on it and so on?

Three, is it unlocked? (if not, you may be able to unlock it, by jailbreaking it first, then do the unlock)

Four, have you checked what sort of SIM-only plans your local phone store offers?

Kasey C:

The first question is… Which carrier was your iPhone 4 first registered on? As it makes a huge difference. Are you sure it's a regular 4 (GSM), and not the 4 CDMA version?
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I bought it 3 years ago with Telus. Apparently, Telus offers GSM and CDMA versions, and as I do not have the iPhone at the moment, I'm unable to answer this question.

Second, are you sure it's clean, i.e. You don't owe any money on it and so on?
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I'm certain to not pay anything anymore, nor do I owe money, so theoretically, it is clean.

Three, is it unlocked? (if not, you may be able to unlock it, by jailbreaking it first, then do the unlock)
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Yes, it is unlocked.

Four, have you checked what sort of SIM-only plans your local phone store offers?
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On http://www.virginmobile.ca, They give us pre-paid plans.http://www.virginmobile.ca/en/plans/prepaid-talktext-plans.html? Itcid=TAB:35