How to figure out if a Prepaid cell phone is right for you

When deciding if a Prepaid Cell Phones might be right for you, there are a number of factors involved in making a decision. Prepay versus postpaid both have advantages and disadvantages, but here we will explore the prepay option.

With prepay, there are no long term contracts with prepaid phone service.
You do not have fixed monthly bills,that you have to budget for each month, and there are no credit checks.

Under age kids love the fact that there are no age limits with many of the services, and there is no activation fees with most prepaid plans resulting in a lower start up cost.


Some of the prepaid plans are from national vendors like Verizon, AT&T, Alltel, and T-Mobile, and operate on "refill cards" that give you a set amount of airtime per card.

Other providers allow you to pay by the month for a set time allowance, or even unlimited airtime, such as MetroPCS and Cricket.

Disadvantages to Prepaid-Cell-Phones
You usually have a higher cost per minute than you will get from a long term contract plan.

Some of the Pay as you go plans are only available in limited areas.

One of the biggest reasons is the absence of termination fees. Sometimes upward of $300, a termination fee can take a huge bite out your wallet!

So how do you choose a phone and service?

Difficulty: Easy

Instructions

1. 
   More adults are turning to prepaid service due to more attractive rates

   Look for what is available in your area. Here in Southeast Lower Michigan, we have major providers like T-Mobile, ATT, and Verizon that offer prepay plans.
   
   We also have smaller companies such as MetroPCS, TracPhone, Net10 and PagePlus.
   
   View each vendor's selection concerning their prepay plans.

2. 
   T-Mobile prepay kit which can be found online, or at most larger retailers

   Determine how you plan to use the phone.
   Example: Is it for emergency use only? Look for prepaid phones that don't have a short expiration date, meaning the unused airtime will not vanish very fast if you do not use it. On AT&T, $15 worth of air time is only good for 30 days, as opposed to Page Plus, where any money you put on the account lasts four months. - Clear winner is Page Plus.

3. 
   The youngest kid I have ever sold a phone to was six (through his parents).

   Is buying airtime cards, or vouchers right, or a monthly service plan?
   
   Generally speaking, the providers will give you more airtime for your money if you pay monthly. You also will have options such as data that might not be as available to you on a voucher based cell phone.
   
   The con to going monthly, is that you do have to pay every month, as opposed to just when you need it.

4. Choose your phone.
   
   Most providers sell up to date new phones, but watch out for "refurbished" cell phones. Although there may be nothing wrong with the handset, I think it is still better to buy new as there is a manufacturer's guarantee on the phone when you purchase it, usually a year.

5. The biggest downside to prepay, is that you do pay more for the phone than you would a comperable model in a post paid contract plan. In contracts, the phone's actual cost is "subsidized" in your monthly payments, and if you do not complete your contract, the providers will get the rest of the money in the termination fee.
   
   If you are unsure of your financial future, then prepay is a VERY good way to go!

[marlin90]

on 9/30/2009 I think an important point to make under determining how you use your phone is to consider international calling too. A lot of prepaid phones dont call internationally, one that does is net10. They have a flat rate of 15 cents per minute for international calls and thats like for over 60 countries. So for someone like me that needs international calling i think net10 is the way to go.

[jestunes]

on 8/1/2009 Excellent article. Well written and great advice. Thanks for the info.
Jesse