Prepaid Wireless

Pros and cons of prepaid cell phones

In general, you don't get the same wide range of choices as with regular monthly cell-phone plans, but this is changing quickly. Wireless carriers now see a huge untapped market when it comes to prepaid wireless, and there are more plan choices, a wider phone selection, more extra features and better pricing than there were just a few years ago. Overall customer satisfaction scores for prepaid wireless service increased substantially in the past year, according to J.D. Power's recent survey.

The benefits of prepaid wireless are pretty obvious: no monthly bill, easier-to-control costs, no credit checks and no long-term commitment. However, there's a laundry list of considerations that could ultimately make a regular, contracted cell-phone plan the better option. If you're not sure which is best for you, see the companion ConsumerSearch report on cell-phone plans .

On a per-minute basis, prepaid plans generally cost more than a contract plan. For example, one of T-Mobile's prepaid plans costs $25 for 130 minutes. That works out to about 19¢ per minute. If you signed a long-term contract with T-Mobile, a $50 monthly plan would buy you 400 anytime minutes at a cost of 12.5¢ a minute, plus unlimited weekend calling. So it's pretty easy to see that buying more expensive monthly plans can be a better deal, especially if you make more than 130 minutes of calls per month.

In addition to per-minute charges, some prepaid wireless plans charge a daily access fee, so it's worth calculating your daily use. For example, even though the Verizon Wireless INpulse plan has a 10¢ per-minute rate, Verizon deducts 99¢ per day when you use their service. AT&T's 10¢ per-minute plan is virtually the same, charging a $1 access fee only on days you make calls -- that's in addition to per-minute charges. AT&T's 25¢ prepaid plan costs more per minute, but there's no daily fee. Some small carriers are a better deal. We didn't find many reviews for Net10, but calls cost 10¢ per minute with no daily access fee, making it a better deal.

Paying a daily access fee for a plan usually gives you a lower per-minute rate, which might be a good deal for heavy talkers, but reviews 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. Extras such as text messaging, mobile e-mail, picture messaging or calling from outside of your calling area (roaming fees) generally cost more.

Some carriers have an "autopay" plan where you are charged each month, but without a long-term contract. This type of plan may have a cheaper per-minute rate with no daily access fees. For example, TracFone has a reasonably priced $5 autopay plan, whereby your phone is kept active for $5 per month. Then you pay for minutes on top of that. $20 buys you 60 minutes and $30 buys you 120 minutes. Others carriers offer options to automatically buy additional time at preset intervals or when minutes expire.

With prepaid wireless plans, your pay-as-you-go minutes don't last forever. Some plans' minutes expire after a set number of days (usually 30, 60, or 90 depending on the amount purchased), so if you don't use your minutes, you lose them. Most carriers require that you spend a certain amount each month (or every 60 or 90 days) to keep your account active, even if you still have minutes or cash remaining in your account. Many carriers allow your unused minutes to roll over to the next month if you deposit more money before they expire. If you spend more all at once, your minutes can often have a longer expiration date. AT&T, T-Mobile and TracFone have annual rate plans; if you spend $100 on prepaid time, your minutes last a year.

In addition, some prepaid wireless plans charge higher per-minute rates but include free night or weekend minutes, or they offer unlimited calls between you and another subscriber using the same carrier. AT&T's 10¢ pay-as-you-go plan, for example, has a $1 access charge on days you make calls, but all calls to other AT&T subscribers are free.

Other costs can include roaming fees (which apply when you're outside your network's calling area), long-distance charges (particularly for international dialing), text and picture message fees, and charges for games, music or ring tones.

Best prepaid wireless

The best prepaid wireless plans balance call quality and price. In this respect, reviews say T-Mobile has an excellent combination of call quality, customer satisfaction and cost. In large customer surveys, T-Mobile gets especially high scores for cost of service. When it comes to prepaid wireless, its T-Mobile To Go plans are pretty straightforward -- $10 buys you 30 minutes; a $25 deposit gets you 130 minutes, and $50 gets you 400 minutes, all with 90-day expiration. If you spend $100 all at once, you get 1,000 minutes, and you have a full year to use them. If you add more minutes to your T-Mobile To Go account before your minutes expire, unused minutes roll over to the new expiration date. You can make calls anywhere in the U.S. on T-Mobile's network, even if you are outside your local area. Sending text and picture messages costs 10¢ and 25¢ respectively. Phones start at $20.

Verizon Wireless gets high scores for voice quality in reviews. has a 10¢ per-minute rate for calls and text messages, and unlimited Verizon mobile-to-mobile calling; you are also charged a 99¢ access fee per day, but only when you make calls. Another plan, INpulse Plus, raises the daily access fee to $1.99, but adds unlimited night minutes and drops the per-minute rate for calls and text messaging to 5¢. A third prepaid plan, INpulse Power, raises the access fee to $2.99 and drops the per-minute charges to 2¢. Clearly, the Plus and Power plans make the most sense for those who don't make calls every day, but who tend to talk a long time per call or who make many calls in a single day. For all three plans, if you deposit between $15 and $30, your minutes expire in 30 days. With a $30 to $75 deposit, minutes expire in 60 days. Deposits of between $75 and $150 expire in 90 days, and deposits above $150 expire in 120 days. There is a $25 activation fee to get started. Calls made from within Verizon's national coverage area are included, but if you're outside Verizon's coverage, 69¢
per-minute roaming charges apply.

Virgin Mobile gets high ratings for overall customer satisfaction in surveys at J.D. Power and PC Magazine -- higher than T-Mobile and AT&T. Virgin Mobile also has youth appeal, with proprietary ring tones and features from MTV. Virgin Mobile has a wide variety of low-cost prepaid plans and excellent call quality according to subscribers. What's interesting is that subscribers give Virgin Mobile higher ratings for call quality than for Sprint, the underlying carrier used by Virgin Mobile. Critics say this might be because youth-oriented subscribers aren't as concerned about call quality, or that better satisfaction generated by customer service and pricing may help minimize complaints about call quality.

Virgin Mobile's pay-by-minute plan charges 18¢ per minute to talk anytime. There's also a 10¢ per-minute plan with a monthly $7 charge, and a plan that charges 10¢ per minute for calls to other Virgin Mobile subscribers and 20¢ per minute for calls to anyone else. These plans are best for those who don't make many calls. All minutes expire in 90 days. Adding at least $20 every 90 days will keep your account and minutes active; unused minutes roll over.

For those who want more talk time, Virgin Mobile offers pay-by-month plans. For example, $25 gets you 200 anytime minutes, and $35 is good for 300 anytime minutes plus 1,000 night and weekend minutes. Free unlimited nights and weekends kick in at the $60 level, which also gets you 600 anytime minutes. These minutes expire at the end of each month, so if you have unused minutes, you lose them. If you go over the plan minutes, additional minutes are 25¢ each. You can top up your phone automatically by credit card or by PayPal, or you can add minutes manually with a top-up card. Phones start at about $10.

If you live in the Midwest, U.S. Cellular is a good option. Many people rave about the service at PrepaidWireless.com, and they especially like the reception and good customer service. Monthly plans are a bit pricey, though. For example, $25 gets you 100 minutes per month and $45 gets you 350 minutes. There are no per-minute plans. Roaming charges are 69¢ per minute. Additional minutes cost as much as 50¢.

AT&T Wireless, formerly Cingular Wireless, gets lower scores than Verizon or T-Mobile for call quality in large surveys. However, in J.D. Power's survey, AT&T's GoPhone did chalk up the same overall customer satisfaction marks as T-Mobile and Verizon. The pay-by-the-minute plan costs 10¢ a minute, in addition to the $1 daily access fee on days when you use the phone. However, there are no roaming charges and your minutes carry over if you replenish your account before they expire. A 25¢ per-minute plan with no daily access fee is also available. If you opt for the monthly plan, you can pay $30 for 200 anytime minutes, $40 for 300 minutes, $50 for 400 minutes or $70 for 650 minutes.

We found several complaints about AT&T by consumers posting at PrepaidReviews.com, though. Some say that there are long waits for customer service and that service coverage can be spotty. Former Cingular customers also say that the AT&T service isn't as good as the now-defunct Cingular. They say that there are more charges and that their service has suffered since the merger between the two companies.

Boost Mobile is a division of Sprint, and it is one of the only prepaid carriers to include a walkie-talkie feature. Boost Mobile's basic pay-as-you-go wireless costs 20¢ per minute on weekdays and 10¢ on nights and weekends. Walkie-talkie (also called push-to-talk or PTT) costs an additional $1 per day, but only on days when it is used. Optional wireless-web access (with a compatible cell phone) is 35¢ per day regardless of usage. There are no monthly payments, and you can add minutes to your phone at any time in increments of at least $10. Minutes expire after 90 days. Users especially like this low cost of service. Unlike conventional cell-phone plans, there's no contract, and you can cancel anytime. Boost Mobile also offers prepaid monthly plans ranging from $30 to $70 a month with unlimited walkie-talkie access, and from $55 to $65 a month for unlimited calling, with the more expensive plan also including unlimited text and web.

In J.D. Power's recent customer satisfaction survey, Boost Mobile was rated as highly as T-Mobile and AT&T, but Virgin Mobile ranks higher than both.

Net10, a division of TracFone, has gotten some buzz. It's running a 10¢ per-minute plan that applies to any type of call (including roaming) at any time. Minutes expire in 60 to 180 days, depending on your plan. Net10 has not yet been rated in big consumer surveys, so call quality, service and overall satisfaction are unknown. Some subscribers posting at PrepaidReview.com complain that customer service was slow and not helpful when they called with questions about their Net10 service. Consumers had the same problem when they called TracFone customer service with questions.

Locus Telecommunications is worth looking into if you make lots of international calls. Besides free long-distance calls in the U.S., you can also call 50 pre-selected countries -- Argentina, Japan, and Spain are a few -- with the Locus Mobile plan. However, you can't dial international numbers directly; rather, you first call a toll-free U.S. number, then key in the international number. With Locus, $10 gets you up to 111 minutes of airtime: the first 15 minutes each day are charged at 15¢ each and 9¢ per minute thereafter. The editors at PrepaidWireless.com give Locus a high rating because it's one of the few prepaid services that folds international minutes into a domestic package. The only downside is the maze of plans available, and since rates are relatively high, the service only makes sense if you use it regularly for international calls. Minutes expire in 30 to 90 days, depending on how much you spend.

If you want to keep a cell phone on hand for emergencies but don't plan on using it regularly, you might consider a pay-as-you-go plan with a long expiration, so you don't have to worry about your minutes disappearing. T-Mobile has a good deal: If you buy 1,000 minutes for $100, they don't expire for a year. AT&T's $100 refill is similar, but adds a $1 access charge for days the phone is used. TracFone also has a plan like this, but $100 gets you 800 minutes.

Using a prepaid cell-phone while abroad

Cellular companies in the U.S. use a number of proprietary networks for their cell-phone service, and that means that a cell phone made to work with Verizon's CDMA network will not work on a GSM network such as those supported by T-Mobile and AT&T. This could be important if you travel overseas and would like to take your cell phone with you, since most European, African and Asian cell phones work on GSM networks. Be aware that American GSM phones and foreign GSM phones work on different frequencies, so you will need a specific tri- or quad-band world phone with multiple frequencies.

In order to swap SIM cards, you will have to ask your cell-phone service carrier to unlock your phone, allowing your phone to send signals on a different frequency. Some carriers will let customers have unlock codes as soon as 90 days into a contract, but others do so only reluctantly. Websites like www.unlock123.com will unlock Nokia phones for about $5. TheTravelInsider.info will do the same thing for most Nokia phones along with many other GSM world phones like Samsung, Siemens, Motorola and LG. Prices range from $5 to $30. The 2006 Digital Millennium Copyright Act has made it legal for individuals to unlock cell phones for personal use.

The advantage of switching SIM cards is that a local SIM card gives you a local phone number, making in-country calls inexpensive (avoiding very high roaming fees). In addition, most countries don't charge you for incoming calls. CNet.com warns that voicemail messages can cost more than at home, though.

Most U.S. prepaid wireless carriers will also let you provide your own phone, as long as it's unlocked and supports their network. So if you already have a GSM phone, you could buy minutes from T-Mobile or Cingular. Carriers may charge an activation fee if you don't buy one of their phones, however.

Most prepaid wireless carriers will let you make calls overseas, but international calls cost more. Virgin Mobile, Boost Mobile and all the major carriers support international calls, but rates are sometimes high. Your best bet is to check before you travel.

Important Features: Prepaid wireless

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

• Before you choose a phone and prepaid plan, 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). 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 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, since 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 roaming charges. Verizon charges 69¢ per minute for roaming, but roaming is free with T-Mobile and AT&T, for example.

• 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¢ and 5¢ each, respectively, and the web access (Sidekick) is separate. Verizon charges 10¢ per text message on its Core plan. Virgin Mobile charges 5¢ per text message, or you can add a separate plan for text and picture messages if you use those features a lot.

Monthly cell-phone plans vs. prepaid wireless

If you have good credit and don't have a preference, you'll have to choose between a monthly plan and a pay-as-you-go plan. If you make less than about 200 minutes of calls per month (that's about one 6-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 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.

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 the individual carriers (listed in Best Research).

Our Consensus Report shows how many times products are top-ranked by reviewers included in our
All The Reviews Reviewed chart.

# of picks	Model (with retailer links)	Price
5	Verizon Wireless	Plans start at 10¢ per minute plus 99¢ daily access fee on days you make calls
5	Virgin Mobile	Plans start at $25 per month or 18¢ per minute
4	T-Mobile To Go	Plans start at $10 per month for 30 minutes
2	TracFone	Plans start at $20 for 60 minutes
2	AT&T	Plans start at 10¢ per minute plus $1 per day access fee on days you make calls
1 each	Alltel, Net10, Boost Mobile, U.S. Cellular

In large owner surveys, Virgin Mobile gets the best overall reviews. Verizon Wireless nearly beats Virgin Mobile with its high scores for call quality, but its prepaid wireless plans are pricey. T-Mobile also gets good reviews from owners. It is generally more expensive than Virgin Mobile, but minutes usually expire in 90 days rather than 30 days, and T-Mobile has a good annual prepaid plan.

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