Prepaid Cell Phones

A viable alternative for many consumers

For those who don't need so many minutes, or who simply don't want to pay so much for service, prepaid or monthly pay-as-you-go plans are an option. These plans are best for people who use their phones minimally (less than 300 minutes per month), have poor credit or have teenage children and want to limit their phone usage. The cost of prepaid cell service has fallen, and many plans that used to average about 25 cents per minute now offer them for as low as 10 cents per minute. Verizon Wireless has a 2 cents-per-minute plan, but it requires a relatively hefty $2.99 access charge for any day you use the phone. Cell-service providers recognize that there's an untapped market out there for prepaid cell phones, so there's a lot more competition, better pricing, wider phone selection and more features. We cover such pay-as-you-go cell phone services in our separate report on prepaid wireless.

All the major carriers such as T-Mobile, AT&T, Sprint and Verizon offer prepaid plans, but it isn't quite as easy as simply paying for minutes, using them up and adding more. All carriers have some kind of expiration policy, whereby you lose your prepaid minutes if they are not used in a certain amount of time, sometimes in as little as 30 days. Most plans let the minutes roll over if more time is purchased before the expiration date, and some have expiration dates as long as one year for larger purchases (typically $100). Prepaid cell phone plans often include the same features as a regular wireless plan, including free nights and weekends with some plans, voice mail, caller ID and call waiting. Mobile e-mail and text and picture messaging, as well as downloadable games, are other available options.