Prepaid Cell Phone Plan Review

Should you choose a prepaid or monthly phone plan?

Prepaid wireless has completely transformed from its humble beginning as a cheap solution for the credit-challenged. It's now become a budget option for all consumers, with more plan choices, a wider phone selection (including smartphones), and better pricing than 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 cell phone plans require no commitment and no credit check. Traditionally the only options 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). Often, you will pay more upfront for your cell phone or smartphone, though dirt cheap options still abound.

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. CBS MoneyWatch and the syndicated column Jim Miller at SavvySenior.org 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, as does TopTenReviews.com.

One of the biggest wireless providers in the United States, 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. The proposed acquisition of T-Mobile by AT&T did not go ahead, so T-Mobile customers (both contract and prepaid) will continue to receive the same cell service and customer support -- and plan pricing will not change for the foreseeable future.