Prepaid Wireless: What To Look For

Choosing between prepaid and monthly cell phone plans

If you have good credit and don't have a preference, you can choose between a monthly cell phone plan and a pay-as-you-go plan, based on your calling habits. If you make less than about 200 minutes of calls per month (that's about one six-minute call per day), a prepaid plan will generally be the best choice. If you'll make more than 400 minutes of calls per month (about 13 minutes per day), a monthly plan is probably the better option. If you think you'll fall into the middle somewhere, you have a more difficult decision.

About.com has a helpful Prepaid Cell Phone Plan Chooser calculator that can narrow your decision. The 12-question quiz helps you calculate the best prepaid cell phone plan for you. It includes questions to determine how many minutes you use your cell phone in a week, how long a typical phone call lasts, etc. You should take this step to estimate usage. (Note: ConsumerSearch is owned by About.com, but the two don't share an editorial affiliation.)

At LetsTalk.com, you can compare plans side by side to see features and prices.

After you determine the type of phone, minute usage and type of service you will use (such as whether you will use text messages or mobile e-mail frequently, whether you're likely to travel out of the calling area, etc.), experts advise going to the next step and doing some fact checking on your own before settling on a plan. Carriers offer deals, rebates on phones and special offers on their websites and in stores, so it is always a good idea to check with individual carriers (listed in the Useful Links section of this report).

Reviewers say the following about shopping for a prepaid cell phone:

• Before you choose a phone and prepaid plan, check the terms, because no two plans are alike. Some require minimum 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). Minutes may have different prices at different times of the day, and some plans include free night, weekend and mobile-to-mobile minutes. Many plans let you roll over minutes by adding funds before existing minutes expire.

• Estimate your minute usage before choosing a prepaid wireless plan. If you use more than 300 minutes per month, you could end up paying as much or more than you would with a monthly plan, and you may be better off with a traditional wireless plan.

• Ask friends and neighbors. Do your own informal poll of people in your area. 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 like CellReception.com and DeadCellZones.com. CellReception.com lets you search for service and cell towns 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. Otherwise you may not be able to use your cell phone as you would with monthly plans, and it may end up costing you much more in roaming fees. If you'll mostly be in metropolitan areas, roaming won't be a problem, because most carriers' networks cover these areas pretty well. Roaming can be a larger issue in rural areas. While most prepaid wireless carriers let you make calls when you're outside their area, you could pay hefty roaming charges. Verizon charges 20 cents per minute for domestic roaming, which is free with Virgin Mobile, T-Mobile and AT&T.

• Weigh non-voice features. Features such as text messaging, mobile web, picture messaging, music, games, etc. are usually not free, and fees can add up fast as people use these features more often. With T-Mobile, for example, outgoing and incoming text messages cost 10 cents and 5 cents each, respectively, and the web access (Sidekick) is 15 cents per minute with a $1/day usage charge. Verizon charges 10 cents per text message on its Core plan. Virgin Mobile charges 10 cents per text message, or you can add a separate plan for text and picture messages starting at $5 a month if you use those features a lot.