Types of prepaid phone plans

Most prepaid wireless carriers offer two types of plans: pay-as-you-go and monthly. Each has its benefits, reviewers say:

  • Pay-as-you-go prepaid plans are just what they sound like: You buy a phone, and then buy service (in set amounts of minutes or dollars) as you need it. You don't need a bank account at all; you can buy refill cards at grocery, convenience, drug and discount stores, or you can use your credit or bank card to add refills over the phone or Internet. Refills do expire, so you'll have to top up from time to time to keep your account active, even if you haven't used all of your minutes. You can add as little as $10 or as much as $200 in one refill.
  • Monthly prepaid phone plans can be more convenient, because you can add a set amount every month. You can have this monthly fee automatically deducted from a credit card or bank account if you like, but you don't have to, and there's still no contract or commitment -- you can quit anytime by simply not refilling for the next month. Plans can cost as little as $10 per month for 50 minutes, or as much as $45 to $60 per month for unlimited talk, text and data.

Prepaid phone plans and pricing

While shopping for a prepaid plan, reviewers say you should keep the following points in mind:

  • Check the terms, since no two plans are alike. Some require monthly or daily usage fees, and minutes expire after a certain period of time (generally 30, 60 or 90 days, though some are good for a year or even two). Minutes may have different prices at different times of the day, and some plans include free night or weekend minutes. Many plans let you roll over minutes by adding funds before existing minutes expire.
  • Estimate your minute usage. If you're a frequent cell phone user, you might save money by choosing a prepaid plan that allows unlimited calls, texts and data for a set monthly fee.
  • Certain plans from Verizon and AT&T charge $2 per day for unlimited talk, only on days you make calls. This might be a good deal for heavy talkers, but reviewers say people who want their phones for emergency or quick calls will probably be better off spending a bit more per minute or going with a plan that doesn't charge an access fee.
  • Some prepaid wireless plans charge higher per-minute rates but include free night or weekend minutes. Other carriers offer unlimited calls between you and another subscriber using the same carrier. Verizon's 10-cent pay-as-you-go plan, for example, has a $1 access charge on days you make calls, but all calls to other Verizon subscribers are free.
  • Ask friends and neighbors. Those who live and work in your neighborhood can tell you how frequently they experience outages, busy networks or dropped calls, especially if they frequent the same areas. Once you gauge satisfaction, check carriers' websites for promotions, shop their retail stores, and call them to see where you can get the best deal.
  • Consult sites such as CellReception.com and DeadCellZones.com. CellReception.com lets you search for service and cell towers by zip code. You can also read subscriber comments for specific areas, down to particular cross streets in your neighborhood. DeadCellZones.com has a complaint database and a listing of dead spots in metropolitan areas.
  • If you travel frequently, be sure to choose a wireless carrier that lets prepaid customers roam (make calls that aren't on their own networks) without additional charge. Most prepaid wireless carriers let you make calls when you're outside their area, but a few charge roaming fees. For example, TracFone charges double minutes for roaming calls. If you'll mostly be in metropolitan areas, roaming won't be a problem, since most carriers' networks cover these areas pretty well. Roaming can be a larger issue in rural areas.
  • Consider non-voice features. Text messaging, mobile web, picture messaging, music, games, etc., are usually not free (although they may be included in an unlimited monthly prepaid plan), and fees can add up fast as people use these features more often. For example, text message rates can range from 3 to 50 cents each.
  • Read the fine print on unlimited prepaid plans. Some, like Virgin Mobile Beyond Talk Unlimited (*Est. $60 per month), really do include unlimited calling, messaging and data with no hidden fees. But T-Mobile's unlimited plan (*Est. $50 per month and up) imposes limits on data usage (web surfing, etc.).
  • Most prepaid plans don't charge anything extra for nationwide long distance, roaming, voicemail or caller ID. However, many do charge extra for data access, text, picture and video messages (although unlimited prepaid plans often include this) as well as games, music or ringtones. Most prepaid plans charge extra for international long-distance calls, although TracFone (*Est. $10 for 30 min. and up) allows calls to specified locations in 81 countries for no additional charge.

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