Prepaid Cell Phone Plan Review

Should you choose a prepaid or monthly phone plan?

Prepaid wireless isn't just for the credit-challenged anymore, reviewers say. Wireless carriers now see a huge untapped market when it comes to prepaid, and there are more plan choices, a wider phone selection, more extra features and better pricing than there were just a few years ago. "Any stigma attached to the [prepaid] phones -- they are a common prop in any show or movie about gangs and spies -- is falling away as prices drop and the quality of the phones rises," reports Jenna Wortham of The New York Times.

Unlike traditional monthly cell phone plans (covered in our report on cell phone plans), prepaid phone plans require no commitment and no credit check. Traditionally the only option for those with damaged credit, prepaid cell phones are also a good way to control costs for teenagers, those on a fixed income or people who want a cell phone only for emergencies.

These days, prepaid wireless is a good money-saving option for anybody, according to The New York Times, MSNBC.com and other sources. You can now get prepaid phone plans that are identical to all-inclusive contract plans, except for two things: They cost less, and you don't have to sign a contract (or risk a penalty of $200 or more if you cancel early).

Large surveys conducted by ConsumerReports.org, J.D. Power and Associates and PCMag.com form the backbone of our report. These reviews poll thousands of households on overall satisfaction with their wireless carriers and are the best way to gauge overall network coverage, call quality and customer service. In addition, we found thorough prepaid cell phone buyer's guides at PrepaidReviews.com, CNET and About.com. CBSMoneyWatch.com and the syndicated column Savvy Senior concentrate on inexpensive, basic prepaid phone plans for seniors. Laptop Magazine, The New York Times and MSNBC.com review several prepaid phone plans as well.

One of the biggest wireless providers in the U.S., AT&T, gets some of the worst reviews for its prepaid plans. AT&T's GoPhone prepaid service (*Est. 10 cents per min. and up) rates below average overall at J.D. Power and Associates and worst overall at PCMag.com, where readers downgrade it on almost every measure -- hefty fees, disappointing plan options, coverage, call quality, customer service and technical support.

But another big wireless company, T-Mobile (*Est. $10 for 30 min. and up), earns praise for customer service at both J.D. Power and PCMag, and reviewers say its low-cost plans are great for folks who just want a cell phone for emergencies or occasional calls.

You may have heard recently that AT&T is seeking approval to acquire T-Mobile; while the deal hasn't yet been approved (and nothing will happen for at least a year), many current T-Mobile subscribers are nervous that they'll lose their good rates. It's unclear right now what the merger will mean for consumers, but whatever happens, little will change for consumers for at least a year. So at least right now, T-Mobile customers can rest easy.