Prepaid Cell Phone Plans

For many consumers, prepaid cell phone plans are a great alternative to signing up for a multi-year contract with postpaid service. The only way to know for sure is to examine one's current monthly bills to determine the average number of minutes used each billing period and then comparing those figures with the per-minute charges of the plans offered by several different service providers. With prepaid service, the customer purchases minutes before using them. However, it should be noted that some plans sell units instead of minutes. For some calls, such as those made to international recipients, a certain number of units may be deducted for each minute of talk-time. Most companies offer the choice of minutes (or units) in several different increments, such as ten, fifty, and a hundred. Generally speaking, the cost per minute or unit decreases with the purchase of a higher increment. For example, a ten-minute purchase may average twenty cents per minute while a hundred-minute purchase may average five cents per minute. The consumer then purchases additional minutes as needed. In addition, the consumer will need to purchase and activate a telephone from the selected prepaid cell phone service provider.

Providers of prepaid plans advertise their services to several target audience segments. Someone who is on a strict budget or who has a poor credit history can carefully monitor his usage and control his costs. In addition, few if any of the prepaid cell phone service providers require a credit check. Someone who is denied postpaid cell phone service from one of the major carriers because of poor credit has the option of purchasing a prepaid plan instead. Advertising also encourages parents to purchase such plans for their children. Parents can monitor the child's usage and avoid the ugly surprise of receiving a budget-busting bill because of a too-talkative teen. These providers target yet another niche: those who only want a cell phone in case of an emergency. These customers don't talk much, but want to have a telephone with them for just-in-case circumstances. An inexpensive telephone with very low usage costs fits their needs just fine. Anyone who fits one of these target audience segments will want to carefully review the different options and make a wise decision when selecting a vendor and plan.

Postpaid plans may come with a contract, hidden fees, and early cancellation penalties. But prepaid cell phone plans avoid these provisions. For this reason, a consumer who isn't tied into a contract is able to change providers more easily and take advantage of special offers designed to attract new customers. However, prospective customers need to familiarize themselves with the small print in the provider's contract to avoid any unpleasant surprises. In some plans, the minutes can expire after a certain time, in some cases, as few as thirty or sixty days. This hardly seems fair since the minutes were bought and paid for ahead of time. The prepaid cell phone service provider may use this expiration policy as an incentive for customers to purchase larger increments. For example, once a certain threshold is reached, perhaps one hundred minutes, these will not expire. Because of this type of provision and the typically lower cost-per-minute of buying larger increments, these can be a good value. However, the consumer will want to be sure to have a clear understanding of all these policies and provisions ahead of time. It just may be that a monthly plan with a postpaid provider, despite its disadvantages, will be less expensive. Solomon once wrote: "For wisdom is a defence, and money is a defence: but the excellency of knowledge is, that wisdom giveth life to them that have it." (Ecclesiastes 7:12)

Different prepaid providers also offer various ways of replenishing minutes and keeping an account active. The purchases may be made online through the provider's website or over the phone. Some major providers have prepaid cards available at major retailers such as gas stations and convenience stores. The customer purchases the card and then follows the instructions for adding the purchased minutes to her account. With some providers of prepaid cell phone plans, regular monthly purchases can be authorized on the customer's credit card. This keeps the account active and ensures additional minutes are regularly added. The cell phones sold by prepaid providers are usually inexpensive and lack many of the extra features included on more expensive phones. The cell phone may not have Internet or email capability, or perhaps it won't have a camera. If these features aren't important, however, inexpensive telephone can be a true bargain.

When evaluating a prepaid cell phone service provider, the prospective consumer also needs to look at the coverage map. In fact, this may be the most important criteria when selecting a provider. It doesn't do any good to save money on a telephone and a plan only to find out that calls can't be made to far-away family and friends because of coverage gaps in the network. Most providers of prepaid cell phone service piggy-back on the giants, but it's important to know this information before selecting a company. Information on the coverage area should be available on the company's website. If not, the company should probably be crossed off the short list of possible contenders for providing one's service. For help in choosing the best provider, consumers can consult one of the many websites that provide comparison charts of various prepaid cell phone plans and their costs. But other factors, such as expiration policies, reliability, and convenience, also need to be considered.