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, refilling the card at grocery, convenience, drug and discount stores or using your credit or bank card to add refills over the phone or Internet.
Monthly prepaid phone plans can be more convenient. With these, you pay a set amount every month, depending on your minutes and data allotment (if any), just like a traditional postpaid cell phone plan. However, there is no credit check or contract, and you can cancel without penalty at any time.
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. Less frequent cell phone users might be better served by pay-as-you-go plans that let you buy time by the minute, and that offer long expiration dates (some are as long as one year).
Ask friends and neighbors. Prepaid providers use the same networks as the major carriers. With that in mind, those who live and work in your neighborhood can tell you how frequently they experience outages, busy networks or dropped calls on the network(s) that the prepaid provider uses. 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.
Check the coverage area. Sites such as OpenSignal and Sensory (see the Our Sources section for details) let you search for service and even cell towers by zip code. Maps, which are powered by data downloaded by users, are constantly updated. Information specific to prepaid carriers is relatively sparse, if supplied at all, but coverage maps for the underlying carrier can be helpful.
If you travel frequently, be sure to choose a wireless carrier that lets prepaid customers roam. Most prepaid wireless carriers let you make calls when you're outside their area, but a few charge roaming fees, which may become an issue in rural areas. Some carriers don't allow roaming at all. If you are frequently in remote areas, carriers that use AT&T or Verizon generally perform best outside of major cities and away from major roads.
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, from 30 to 365 days. Many plans let you roll over minutes by adding funds before existing minutes expire (topping off).
Read the fine print on unlimited prepaid plans. For example, data might be unlimited, but go over a certain amount of usage and your data will be throttled back to 3G or even 2G speeds.
Extra services can add up. Most prepaid plans don't charge anything extra for nationwide long distance, roaming, voice mail or caller ID. However, many do charge extra for data access, international long distance, text, and picture and video messages (although unlimited prepaid plans often include this) as well as games, music or ringtones.