Buying guide for best prepaid cell phones
Prepaid cell phones have widespread use in the United States. Those people communicated as they wanted without the concern of being locked into a multi-year contract. Whether it was an occasional user, a young adult without established credit, or someone requiring emergency phone services for a limited amount of time, a prepaid cell phone served all of these people well.
But what's the fine print? Does a prepaid phone allow you to text? Will you lose service if you don't make any calls for an extended period of time? Are there hidden costs and fees involved?
How does a prepaid cell phone work?
With a contract, a cell phone user agrees to regularly pay for the service he or she uses after he or she has used it. It's like dining out at a restaurant: once you've enjoyed your meal, the waiter brings the bill and you pay it. If you have a one- or two-year contract, it’s like you’re agreeing to eat from the same menu for the next 365 to 720 days.
With a prepaid cell phone, the opposite holds true. You buy what you think you’ll need and use it as you wish. This is the equivalent of going to the grocery store, picking out what you want, paying for it, then bringing it home to eat whenever you get hungry.
It's not a revolutionary concept by any means. As a matter of fact, it's based on the same principle as the payphone, which was invented back in the 1880s. To operate a public payphone, you dropped a coin in a slot, which signaled the operator that you wanted to make a call. When you ran out of time, you received a notification telling you to add more coins or the call would be ended.
That's how a prepaid cell phone works, only instead of locating an unoccupied phone booth from which to make your call, you carry the phone around in your pocket. Whenever you are running out of your prepaid time, you simply add money to your account to keep the service active.
Did you know?
One of the curious benefits of prepaid cell phones is that most companies do not pass the cost of Telecom taxes on to their customers. Contracted customers almost always have this cost included in their bill.
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Who could benefit from a prepaid cell phone?
If you don't make a lot of calls
If you don't make a lot of calls and are not addicted to checking messages or social media streams, this could be your solution. You pay for what you need, and you recharge as necessary.
If you’re trying to teach responsibility
If you are a parent who wants to teach a teen responsibility, a prepaid cell phone can help. A child gets first-hand exposure to the concept of monthly budgeting when he has a monthly allotment of phone minutes to spend. Owning a prepaid cell phone can teach a young person valuable lessons about budgeting resources.
If you have credit trouble
Even if you haven't established any credit yet, you can get a prepaid cell phone. How is this possible? You are paying in advance, so credit is not an issue.
If you want to take a cell phone for a test drive
Sometimes, before jumping headlong into a commitment, it’s nice to have a bit of a test drive. You may be wondering if owning a cell phone is right for you. A prepaid cell phone lets you take a “trial run” without making a huge commitment.
If you’re concerned about privacy
With all the concern about identity theft and being traceable at any given moment, a prepaid plan – along with a disposable cell phone – could provide some the personal space and peace of mind you desire.
"Are you worried about the reliability of your cell phone service? Prepaid cell phones actually use services owned by other companies. For instance, a prepaid cell phone from Company A might use Sprint's network while a prepaid cell phone from Company B might use AT&T’s network."
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Advantages and disadvantages of prepaid cell phones
Advantages of a prepaid cell phone
Freedom: You are not bound by a long-term contract with limits, overages, and additional charges.
No penalties: If you want out, you won't have to pay a fee to break your contract.
No monthly bills: When you are paying for minutes and data, you only pay again when you run out.
Flexibility: You can use your prepaid cell phone as little or as much as you like. When you run out of minutes or data, just pay again. If you have extra and your plan is a monthly plan, those minutes and data might roll over to the next month.
Anonymity: A prepaid plan can help you maintain your privacy.
Budget control: With a prepaid cell phone, you pay first, so you are in complete control of your phone budget. There will be no surprises.
Disadvantages of a prepaid cell phone
Losing your number: If you switch to a different carrier or let your cell phone expire, you may lose your number.
Limited features: With a pay-as-you-go phone, you may find you do not get all the latest features that other phones offer.
Expiration date: Some cell phones have an expiration date. If you do not use the phone or purchase more time within a certain period, it may be deactivated.
- Unexpected initial fees: As with a contracted phone, be sure you understand the fees. Is there a daily access fee? Will you be charged extra for downloads, roaming, texting, streaming, or other features?
To get a prepaid cell phone, there is no credit check, no deposit, and no long-term contract required. None of that is necessary because you are paying in advance for the privilege of using the cell phone.
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Questions to ask before choosing a prepaid cell phone
Ultimately, what makes a prepaid cell phone right for you comes down to the plan. What exactly does it offer? Following are some questions you will want to ask yourself before selecting a prepaid cell phone.
What will you be using the phone for?
Will you just need voice service, or are you interested in data as well? You can have it all; just make sure the plan you choose is right for your needs.
Do you want a monthly plan or a minutes plan?
There are many types of prepaid cell phone plans available. Some have very limited service – as low as 30 minutes per month – while others offer unlimited service. If you know approximately how much you'll be using your prepaid phone each month, look for a plan that best fits those usage requirements.
What kind of coverage do you need?
Where do your friends and family live? Will you need to make international calls? Will you be traveling? Will there be roaming charges if you leave your coverage area? These are all matters that you need to consider before making a decision.
How upset do you get about hidden costs?
Most prepaid cell phone users pay fewer hidden costs than contracted phone users. However, you will still likely be hit with a one-time access fee. Do your research to avoid unexpected charges.
Do you want to be able to carry over unused data or minutes?
Some plans terminate unused minutes and data immediately while others offer a limited carryover. You’ll want to find out when your unused minutes and data expire before investing in a prepaid cell phone.
Do you need your phone to be a hotspot?
Not all plans allow you to use your cell phone as a WiFi hotspot. This is especially true for many prepaid plans. If you will need your cell phone to be a portable WiFi hotspot, make sure the plan you are considering allows that.
How good are you at paying on time?
Unlike contracted plans, when your minutes are gone, you're done. There are no late fees because your service simply shuts off. If you want to keep your cell phone service running uninterrupted, you need to budget properly to stay on top of your usage habits.
What types of features do you need?
Cell phones have as many features as a computer. Which are most important to you? Some possible features include voicemail, caller ID, call waiting, three-way calling, customized ringtones, WiFi calling, internet access, streaming, gaming, and messaging. Be sure your prepaid cell phone can do all the tasks you need it to do.
FAQ
Q. How do I check on and manage my account?
A. With most plans, you can check your account details by logging in from a computer or your prepaid cell phone, if you have data. From there, you will be able to check your usage, see if you need to add more minutes, and make payments.
Q. How do I know my service is working?
A. Many plans require you to make a call to activate your cell phone. If you do not make a call in a timely manner (check the fine print to see how many days you have to make the call), you run the risk of forfeiting any funds that have already been paid into the account.
