Prepaid Cell Phone Plans
"I've noticed that Verizon, AT&T and other mobile phone providers are offering pre-paid cell phone with pay-as-you-go billing. I like the idea of not having a long-term contract, and I don't use my cell phone all that much. Would a pre-paid cell phone be a better option for me? I've looked at some of the plans, but they are so confusing." |
Is Prepaid Wireless a Better Option?
Prepaid wireless is a way to keep things relatively simple. It works just like rent: you pay for a month's worth of use in advance, and if you don't pay you get kicked out almost immediately. There are no heart-stopping surprises at the end of the month, when you learn that you (or someone else) ran up a four-figure tab. With a prepaid wireless plan, you pay for a certain number of minutes in advance, at a certain rate per minute. When you run out of minutes, you have to buy more. That's simple, honest, and true. But of course, phone companies can't make enough profit that way, so they make things more complex.
First, there's the "use it or lose it" aspect of the bundle of minutes you buy at the start of each month. Again, this works just like rent; you pay $X for the ability to use an apartment for a month, but it's up to you how much time you actually spend in the apartment. That sounds reasonable, but it isn't with phone service. With rent, the landlord gets the same profit no matter how much or little you use the apartment. But phone companies make more profit when you don't use all your prepaid minutes. That 7 cents a minute bargain becomes 14 cents if you use only half of your prepaid minutes. Phone companies want you to buy more minutes than you will actually use, and so they make their pricing plans complex.
Comparing Prepaid Wireless Plans
AT&T prepaid wireless goes by the brand name GoPhone. It might better be named GoAway because the pricing plans are so complex they discourage people from buying. In fact, AT&T deliberately makes it difficult to find out what it costs. For some reason, they force you to compare the specs of various cell phones, then they ask you to "enter your ZIP Code so we can show you the best offers available in your area." It doesn't get any less simple than that.
Verizon prepaid wireless also requires your zip code, but you can sort of figure out your costs before providing that information. Verizon doesn't sell minutes, but days of unlimited minutes. That seems to violate the laws of time, but that's their offer. A mere 99 cents buys unlimited minutes - or just one minute, if that's all you use. If you don't use your phone on Monday, you don't pay for Monday. Things get much more complicated as one considers the expiration dates of prepaid minutes and whether you expect to call (or be called) only from Verizon Mobile customers, on weekends, or at night.
Net10 is a bit simpler, but there are still some twists. You can prepay $20, $30, $60 or $100 per month. If you buy larger chunks, the minutes are cheaper and won't expire as soon. For example, if you buy 200 minutes for $20, they expire in 30 days. 600 minutes will cost $45, they expire in 60 days. A block of 1500 minutes for $100 is the best deal, and gives you 180 days to use them. And just to add another wrinkle, you can also prepay $50 for unlimited minutes on a 30-day plan.
You may not have heard of Net10, but Tracfone is one of the best known names in prepaid wireless. The companies are owned by the same corporation, but they offer completely different sets of prepaid calling plans. At the entry level is the 50 Minutes Value Plan for $9.99/month. Other options are 125 minutes for $19.99, 200 minutes for $29.99 and Family Plans that let you have multiple Tracfones.
Some Tips to Help You Decide
Prepaid cell phones are great if you don't use your cell phone that much. They simplify the process of owning and using a cell phone by allowing you to buy the phone that you want and prepay for minutes that you will be using during the upcoming weeks. You don't need to have a credit card, you don't have to sign a contract and you can cancel your relationship with the cell phone company at any time. It can be a good deal if you want to give a cell phone to a child or senior who will only need it on an occasional basis. However, if you use your prepaid cell phone a lot during a month you will have to frequently load your phone with more minutes. Also, since prepaid minutes are generally more expensive than contract cell phone minutes, you will rack up a larger monthly bill using your prepaid cell phone than if you had a contract cell phone plan that offers you unlimited minutes.
When shopping for a cell phone and cell phone service package you need to determine what is going to be better for the amount of time you spend on your cell phone. People who use their cell phones infrequently, or who just want a cell phone in case of an emergency, are generally better off using a prepaid cell phone, while people who spend a lot of time on their cell phones are better off signing up for a regular cell phone contract.
Here's my advice... talk to friends or neighbors in your area who have cell phones, and find out which carrier has the best signal and coverage in the locations where you plan to use the cell phone. It's not uncommon for phones from one carrier to work great in a certain location, while another carrier has a weak signal or none at all. Then use the information above to compare the pre-paid plans offered by the cellular companies that have good service in your area. Try a pre-paid cell phone for a month or two, and if you find you're using it more than you anticipated, upgrading to a service contract with a set monthly fee may make sense for you.
Do you have something to say about prepaid wireless phone service? Post your comment or question below...
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Posted by Bob Rankin on 20 Jun 2011
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Article information: AskBobRankin -- Prepaid Cell Phone Plans (Posted: 20 Jun 2011)
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Most recent comments on "Prepaid Cell Phone Plans"
(See all 74 comments for this article.)Posted by:
Linedancer
03 Jul 2011
You neglected to mention Virgin Mobile. I am essentially a non-user so the plan offered by VM is perfect for me. Every 3 months, my account is auto-topped up for $15.00 on my credit card. If I use the phone, I am charged $.18 per minute. The money never goes away, it just keeps adding up every 3 months. My husband, who never uses his phone, has over $200 in his account; I have about $100. This is perfect for us.
Posted by:
Tina
03 Jul 2011
I use T-Mobile and average $5 per month usage. The minutes roll over for an entire year. If you buy 1000 minutes for $100 then any additional minutes that you buy within he year will have 15% more added to it each time you refill. I love my prepaid phone. I bought a motorola V195s nothing fancy, 3 years ago and even after dropping about 6 times on concrete from the roof of my car it did not break and still works fine. T-Mobiles customer service is excellent. I use my debit card to add $15 every 3 months. After I add the $15 by keying my info into the phone I get a free text message from T-Mobile immediately stating how much I added, thanking me, and how many minutes were added and informing me that since I bought $100 in the past that 15% more us dollars and minutes have been added at no charge. For me, this is a no brainer.
Posted by:
jkcook
03 Jul 2011
I'm visiting for a month from Germany and chose the Verizon pre-paid since all of my family here have Verizon phones. I do pay the $1/day, but then all my family calls are free, no matter the number or length. It also includes a bunch of texts, but I don't remember how many off hand. Not enough that we've ever had to pay. One nice feature is it shows the current amount left on my account right on the opening screen each time I open the phone. Verizon's also got great coverage.
Posted by:
Wayne
04 Jul 2011
I use Virginmobile USA & am completely satisfied.I didn't like Tracphone because if you change your area you have to re-program it to not incur roaming charges.My cost is cheap, $5/month & the coverage is totally adequate as long as I stay in urban areas or along National highways.For the money you can't beat it.No roaming,minutes roll over, & activation is totally simple,not like the multiple menus of Tracphone.
Posted by:
JeanInMontana
04 Jul 2011
I too have had a Tracfone for years. Still using minutes from the first one. I haven't bought minutes in years. Air time I went with the safe plan they offer with auto pay from my checking account for $7.00 a month I never have to remember to add air time. They have some smart phones now too I'm seriously thinking of getting one because all the other guys demand a contract and huge deposit.
Posted by:
curls
28 Jul 2011
A more interesting comparison to me, is what type of phones they offer. I believe some offer a sim-card type that can be unlocked. Not sure if any phones offer enough different frequencies to then be useable outside the US while traveling by popping in a local sim card. I haven't been able to track down this info yet.
I have virgin mobile, similar to others - $15 to buy $15 worth of air time every 3 months, which never expires as long as I keep actively buying. Per min calls are .10 or .25 cents depending. So for $60+ a year, I have a phone with plenty of minues. For occasional use it's perfect. My only thought of switching was if I could then invest in sim-card phones instead since I tend to travel overseas.
Posted by:
Charles Heineke
10 Aug 2011
Most people in the U.S. are unaware of what is probably the best pre-paid cellular option for many people--Lightyear Wireless. That's because it advertises only through its independent representatives.
Lightyear offers truly unlimited Talk, Text, and Data (with NO Data Caps) for only $59.99 per month, hosted on the nationwide Sprint network, which tied with Verizon in a recent customer satisfaction survey. The taxes and fees are only about $5.00/mo., unlike the majors, making its unlimited service only about $65/mo.--half the price or less of the major providers. And by referring only 5 new customers, one time, your service can be free forever, as long as you and they maintain your service. This is No Contract, No Credit Check, No Deposit, No Hassles, No Surprises, pre-paid, fixed rate service.
They also offer lesser plans for those who don't need an "all you can eat" plan.
Lightyear Wireless is the 3 year old wireless division of 18-year old, publicly traded Lightyear Network Solutions, LLC, a federally licensed telecommunications company in business since 1993.
Posted by:
Dolly Parton
18 Oct 2011
Lightyear Wireless is the best cell phone plan I ever had! http://lightyear111.net
Posted by:
howard
18 Oct 2011
I have had boost mobile for years and I am very satisfied. For $55 I get unlimited voice, text, web access and service in Canada( as I live right on the border in Michigan). Its the cheapest I've been able to find and no other company has been able to beat them. It works everywhere, I went on a cruise a couple of years ago and was out of sight of land in the Gulf of Mexico and I still had service. Of course, signal strength depends on you phone. The cheaper phones don't get the greatest signal reception. Boost Mobile now has smart phones available, which they did not until this year. If anyone can find a cheaper plan with all of the same services, I would like to know about it......
Posted by:
Bhall
22 Nov 2011
Virgin Mobile has been WONDERFUL. Easy to use and now my 'family plan' can be custom-tailored to our family's actual use: Low cost unlimited texting and data plans for the kids, more talk minutes/less data & text for me! I've saved hundreds upon hundreds of dollars so far and haven't suffered any reducion in service. Win-win.