Prepaid cell service: 5 reasons to consider it now

Prepaid cell service—as in service without a contractual obligation or early termination fee—continues to surge in popularity. If you’re intrigued by making the switch from a traditional contract plan, but haven't been keeping up with the fast-changing options to do so, here’s why you might want to try prepaid:

1. Prepaid plans offer a diversity of pricing schemes. You can buy prepaid service in three different ways:

• Prepaid bundles. These range between 30 to 5,000 minutes and cost $10 to $400;


• Pay-as-you-go plans. These charge 5 to 25 cents per minute used, with or without a $1 to $2 daily access fee or per-day-use charge; and


• Monthly-fee plans. These are much like a traditional contract plan, and range from 50 minutes to unlimited minutes per month.

2. You may save money—especially now. In the last Consumer Reports survey of satisfaction with cell-phone service, more than 70 percent of those who had switched from a regular contract-based plan said prepaid was costing them less. And that was before what’s starting to look like a price war in prepaid. The latest salvo: Two Tracfone monthly plans under the brand name “Straight Talk,” available in about half of the country. One plan offers 1,000 voice minutes, 1,000 text or multimedia messages, and 30 MB of data over Verizon’s network for just $30; the other unlimited voice and text, plus 30 MB of web access for $45.

Boost Mobile offers unlimited voice, text messaging, web, and push-to-talk for $50 per month. Virgin Mobile offers unlimited voice plans for $50 from $80, but charges an additional $10 for unlimited text messaging, and for 50MB of web access.

3. Prepaid phones are no longer just plain vanilla. True, you can’t—at least yet—get prepaid plans for the iPhone, Palm Pre, and some other hot phones. But you can get models with cameras, web access, Bluetooth capability, and QWERTY keypads.For example, MetroPCS Communications offers the Blackberry Curve, while both PCS and Leap Wireless offer various Nokia, Samsung, and Motorola phones. (See our full Ratings of cell phones and smart phones, available to subscribers.)

4. Apps and capabilities are growing. A few examples: Virgin Mobile phones have access to social networking, chat, and find-a-date services. Boost offers Fox Sports newscasts, games, and navigation applications.

5. You may not need to buy a new phone. Prepaid service isn’t provided only by relatively unfamiliar names, but by the major contract carriers. (Sprint offers prepaid through its separate Boost brand.) In some cases, you don’t need to switch phones to switch plans. You may even be able to use your GSM phone (from AT&T, Net10, T-Mobile, and Tracfone) with another GSM carrier.

However, prepaid plans aren’t for everyone, and not every prepaid option is a bargain. We’ll detail what to watch out for in an upcoming blog. —Jeff Blyskal

Comments

[CAW]

I'm one those people who wanted the bare minimum--I needed a mobile for emergencies ("I'm stuck in a snow-bank") or for that all too often supremarket call ("Bread, milk and what?"). Otherwise I could care less about a mobile phone and won't use one. If you're in this category, take a look at TracFone---you can buy a mere 60 minute card for 20 bucks (time doubles if you bought a special promotion phone) that will last for 90 days before they expire. TracFone also offers larger packages for heavier users. Worth looking into especially if you're on a budget.

[Robinson]

Alan, I'm with you! Where are the plans were the minutes do NOT expire? The similarity in prepaid plans is striking and disturbing!

[ES]

Do prepaid phones compete economically with family plans?

I currently have Verizon Family plan, where the 2nd and 3rd phones cost each $10 a month. Together, we're doing fine with 700 combined minutes (about $80/m.)

Can I save money by switching the family to prepaid?

[Dave S]

I have been using Page Plus (www.pagepluscellular.com) for a couple of years and I happy with it. Page Plus uses the Verizon network.

[Larry M]

Alan, I have used Cingular (AT&T) pre-paid for several years. You can purchase a $100 block of air time that is good for 12 months, and leftover minutes will carry over to the next year if you renew before they expire.
It's not quite what you're hoping for but the longest expiration period I have found. That said, I can't comment on others since I've not researched the market lately. But I am doing that now before I buy another cell phone for my spouse.

[SuperD]

As a college student, I don't have enough money to pay the pricy cell phone bill that I have been paying for the past few months. My friend told me at the beginning of the month of a company called TracFone. They are a prepaid cell phone company -- which means, I only pay for the minutes that I need. The best part is that you don't need to spend a lot of money on contract phones. Tracfone recently came up with a plan called "Straight Talk". I had NO IDEA what it was until I did some research. Here's what it is: you pay 30 dollars a month and it includes 1000 anytime minutes (nation wide), 1000 text messages, 30 MB of data and no overage charges! You can get them at Wal-Mart stores for very cheap. It's great for college students, elderly, children, and people who do not use their phones too frequently.

[don]

I have been on 200 minutes a month with ATT for 2 years. A good feature is that you can carry over any unused minutes. Also the coverage is very good. I do not text often and do not need alot of minutes.for me prepaid is the way to go

[Cassandra Alvarez]

So true! I hve a prepaid phone and I love it! I never have to worry if I'm talking too much, texting too much or if I'm going to have enough money when the phone bill comes at the end of the month. I recommend my prepaid phone to everyone I know. I know how much I need to have to pay my bill and it will never get any higher. Right on, this article is so on point!

[Rich Clark]

By my direct observation, nearly all cell phone use is frivolous, and people are paying through the nose for the privilege of talking about nothing in inappropriate places. Prepaid can save people as much as 90% of their cell costs while still giving them something they can use for emergency or important informational calls. I've used Tracfone for many years, paying about $100 a year for all the time I need, and as a bonus I get to actually notice and enjoy where I am and what I'm doing from moment to moment.

[Ron]

Does anyone have a formula for comparing a standard contract plan and pre-paid options - to figure out which is most economical for them?

[Myrna]

My husband spends a week every year at Boy Scout camp. Ordinarily he refuses to carry a cell phone. I bought him a pre-paid phone this year. Instead of standing in line at the camp office, trying to make a call (for which he wouldhave been charged) to reach a parent, and then hoping the return call would find him, he used the cell. A couple of years ago, the car in which he was driving kids to camp broke down on the road; he hiked 2 miles to find a pay phone to call the rent-a-car company.

[V. A. Davis]

I have saved, relatively speaking, a shocking amount of money (for me) since I switched to the Verizon $0.99/day prepaid plan, on used days (either accepting or making a voice call)...the trick is that I added the $10\month, almost unlimited, messaging option. I am NOT charged a daily usage fee when I only text/picture/voice-recorded-message to other Verizon customers, plus I can send or receive 250 additional texts to/from non-Verizon users. The 250 text messages to non-Verizon phones are limited to text only and 160, or so, characters. Plus, I have available, for an additional $0.99/day, web access and, also, have available the Verizon GPS service for a per day usage fee...I believe that is $2.50 or so.

Plus, the Blitz (from UTStarcom, I understand) qwerty-keyboard phone (which cost $99 + tax, etc.) makes it sort-of easy for even this great-grandfather to text. HEY!...I AM getting better at it, by golly.

So far, I am relatively pleased.

[Ed]

I have been using a pay-as-you-go plan from T-Mobile for a few years now. It saves me the cost of a monthly bill. I don't live on my cell phone, and only use it when I need to make a call. It is a very economical option. Their plan is better than some in that I do not pay any type of daily or monthly access fee (which would defeat the purpose of trying to avoid the monthly charge)

[EisenSLC]

Along with the advantages of prepaid service, there's at least one caveat to be aware of as well: prepaid coverage areas often are smaller than the coverage areas accessible under contract plans, even from the same carrier. This can be a very practical consideration if (for example) one travels in rural areas with any frequency. Also, from what I've read previously in Consumer Reports and other sources, prepaid phones -- at least some of those bought "off the rack" in stores -- may not relay important information to 911 operators in the same manner as non-prepaid phones (e.g., name of caller). These concerns are among those that have stopped me from going "prepaid", at least so far -- even though I stand to save quite a bit of money by doing so.

[Alan Gore]

The big BUT is...do any of the prepaid plans offer minutes that don't expire?