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Consider Prepaid Cell Phones
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When you think of prepaid cell phones, what do you think of? If you’ve watched The Wire on HBO, a gritty drama about life in Baltimore, you associate them with drug dealers. If you were a fan of the Sopranos, you knew they were good for avoiding wiretaps. If you haven’t seen either, chances are you don’t associate them with anything. Most people don’t use prepaid cell phones because we naturally think to a nice buffet-type minute plan with a major carrier.
For our vacation to Europe, we used a pay as you go phone. We couldn’t use our own phones since we didn’t have compatible technology but our friend lent us her old phone. We went to a local Orange store (a pay as you go service company, bought a Sim card, and loaded it up with some minutes.
The cost of the chip? £0.
We put £5 on the phone and we now had cell service without a commitment, without any huge up front payments, and we only pay for the minutes we needed.
Topping Up
Topping Up is the term used whenever you add minutes to your phone. There are a variety of ways you can top up. The easiest was to a credit card to the SIM card, which would top it up in pre-defined increments. If you didn’t want to link a card, you could top up by going to an ATM/cash machine or to a local grocery store. You pay for the minutes, the register prints a voucher, you text the code to the phone company and your minutes are added in just a few seconds.
A lot of people in UK and Europe use pay as you go cell phones and there may be something to it too… Americans pay more than anyone else for cell phone service. We pay more than $600 a year, while some people pay less than $140 a year!
Consider Prepaid Cell Phones
Take a look at your cell phone bill and review how many minutes you used last month, assuming it was a typical month. Be sure to add every minute, from the Anytime minutes to the Night & Weekend minutes (whatever your provider calls them). Then just divide your monthly cost by the number of minutes and you have your per minute cost. I have a phenomenal plan from Sprint, the SERO plan from years ago, where I pay $35 a month for 500 minutes and unlimited data and text messages. Last month, I used 674 total minutes at a cost of about 5.1¢ a minute.
How does that compare to a prepaid phone? I’m going to use T-Mobile’s program as the benchmark only because the rates were the easiest to find. With T-Mobile, you can pay $1 a day on the days you use the phone or ten cents a minute. For me, that plan doesn’t make sense because I pay less than 10 cents a minute plus I get the benefit of unlimited text and data.
Another fixed cost to consider is the cost of the phone itself. Usually prepaid cell phones don’t offer a lot of the bells and whistles of other phones, so what you’ll be getting is a bare bones phone for somewhere in the neighborhood of $25 – $50. It’s a fixed cost that you probably wouldn’t have with a fixed plan so be sure to include it in your comparison.
One other side thought to consider… you probably will use your phone less if you’re paying per minute. I think it’s a great way to save money if it makes sense for you and if you’re not already in a contract.
If you use a prepaid phone, I’d love to hear your opinion of it in terms of call quality, savings, convenience, etc.
(Photo: bchai)
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“Americans pay more than anyone else for cell phone service. We pay more than $600 a year, while some people pay less than $140 a year!”
I’m just curious – does this have much/anything to do with the geopgraphy of the US? The size of the US is on par with the size of the entire continent of Europe and has large chunks of area with low population density. Providing coverage to some of these areas probably isn’t cheap.
Just throwing the idea out there – maybe this has very little bearing on cost.
Thanks for posting this. I have started researching this topic, and am considering making the switch. I am curious to see what “Pay as you go” company you (or other readers) would recommend.
I use very few minutes each month, and I really think it would be possible to save some money by going with this option.
I like the idea of going prepaid while overseas. A prepaid cell phone is a good way to cut expenses but I’m used to the cool features on my phone so I don’t think I’ll be switching any time soon.
I use Virgin Mobile. Pay $60 per year for one and $80 per YEAR for other.
Those fees get me minutes @ 25 cents per – but over 10 minutes in a single day and calls are 10 cents per minute.
I never buy extra minutes, using phone only occasionally.
Love it. Convenient and very frugal
Husband & I switched to Net10 earlier this year. Used to have a family plan where we shared 500 minutes/month and between the two of us used about half of that. With texting added on and taxes, etc., we were paying about $90/month. We got our Net10 phones for $30 each and that included 300 minutes. Service & reception is great. It is costing us about $15 a month, 10 cents per minute and 5 cents per text, no daily usage charge. This cost us about $30 per month for the two phones combined. And yes, I have been using it less. He uses it about the same (didn’t use much before to begin with), but it really is no inconvenience. If I use more, I add on more minutes. This way we just pay for the minutes we actually use.
good for you; and i’m very poud fo you for the switch. i have been using net10 for over 3yrs; no regrets at all, very good service
Like Mark above my wife and I use Virgin Mobile for our cell service. I spend about $60-70/year for mine, and my wife spends closer to $150/yr. For someone who doesn’t use their phone much (like me) it is the ideal cheap (but reliable) cell service. Even for my wife – who when she talks, talks quite a bit – Virgin is still extremely affordable.
I switched to Boost Mobile a couple of years ago, and I’ve very happy with it. I don’t use my cell phone a lot (mostly when I travel), and so I save a LOT of money. It’s been a while since I figured it out, but I think I spend about $75/year.
We looked at going prepaid, but between my wife and I, we talk for about 600 minutes a month. I can’t find a pay-as-you go that will be cheaper than the T-mobile $50 for 750 minutes. Even if we only use 600 minutes, that comes out to 8 1/3 cents a minute.
I’ve ordered some hardware so we can use VoIP when we’re at home, and maybe get down to 400-500 mobile minutes a month, then pay-as-you-go will start to be more affordable for us.
I have the T-Mobile “Pay as you go” plan. I could spend as little as $10/year, but that would only buy 35 minutes. It costs about 10 cents/minute if you buy minutes in $50 or $100 increments. The nice thing about this plan is that the minutes rollover as long as you don’t let them expire.
I’ve been very happy with their service, although it’s very basic. Their phones aren’t very good, but you can always buy an unlocked phone elsewhere.
I’ve been using AT&T’s (Previously Cingular) prepaid plan for a couple of years now, and I’ve saved a bundle. I don’t use my phone much, so it cost me about $100/year.
Now, I am a geek and love Smart phones, and really like the fact that I have my notes and Outlook on my phone. The ‘problem’ is that I don’t think there is a prepaid phone that is also a smart phone out there (this may be changing). So how did I solve the problem?
I found that the AT&T perpaid sim cards don’t really care what phone they are in. So I bought the cheapest phone available (actually $25 with a $25 time credit), then threw away the cell phone and used the sim card. For a phone, I got on eBay and bought a very nice used HTC 8525 (Windows Mobile 6, full keyboard, touch screen, wi-fi) for about $120.
Note, data is fairly expensive with accounts like mine, so I do not use AT&T for web access unless I’m desperate. However, since the phone has Wi-Fi I can get on the Web at most coffee shops.
Mark
One correction on my last post. Phones come in two forms, locked and unlocked. Locked phones will only work on the network that they were sold for.
But as far as I know, prepaid sim cards work with any phone for their network.
I would like to hear if this is not totally true.
Mark
I have a pay as you go Tracfone. It’s $20 for 60 minutes plus I think about 2 months of service before the minutes expire, but minutes do roll-over. I did find out though, that if you let the service plan expire, you do not lose your phone # or service completely. The phone just becomes Inactive. You can easily activate the phone again by buying more minutes right thru the phone with your credit card. So if you did not need the phone available to use for a month, two or three +, you could just leave the phone service @ zero dollars expense, and re-activate it immediately in about 3-5 minutes time frame (phone call from your expired phone) when ready, and be back in business. I like this ability alot and I’ve done it many times…
My folks use prepaid for their low-end phone with T-mobile, 1000 minutes for $100 that expire in 1 year. Each text msg = a minute. That works for them.
I have a G1 smartphone and use it all the time. At the time t-mobile had the least expensive data plan.
I’ve been seeing commericials that t-mobile is charging $50/month unlimited. That’s a good move because almost everyone I know would rather text then talk anyway, so demand for voice is falling. But I’m guessing demand for data is increasing. I wonder if the unlimited plan includes data…..must look it up
Thanks for this post! I’d written off pay-as-you-go in the US as being too expensive, but given how little I use my phone, your calculations have made me reconsider. I’ll have to sit down and crunch my own numbers.
I’m a little confused about the T-Mobile plans you mention, though. As I read it, their plans are either 10 cents a minute + $1/day (for the Pay by the Day plan) or 10-33 cents a minute, depending on how many minutes you buy (for the Pay as You Go plan). IIRC correctly, the Pay by the Day plan rates are pretty similar to the AT&T PAYG plan a friend had, but it looks like AT&T has a lot more PAYG plans now than they used to.
I love my Virgin Mobile prepaid – one of the best ways to go. The AT&T prepaid is pretty good as well. I like the fact that I put $20 on roughly every 90 days, and I’m in good shape. I buy a 30 text package for $2 every 30 days, and at 18 cents a minute for calls, I’m in good shape. Anything similar on a contract phone would run me $35 a month minimum. Does the phone have all the bells and whistles? No. Do I care? Not really.
I’m in Canada, so different rates and plans (and companies). I use a pay as you go phone and it’s wonderfully cheap. I pay $10/month for unlimited text messages, and 1 cent/minute evening and weekend calling. Daytime minutes are steeper – 39 cents/minute, but you can get plans that are the same rate anytime.
I spent $60 on my phone and got a $50 credit when I opened the account. Most months I spend a bit under $20.
I had Verizon on contract for over 12 years before switching to both an STi Mobile prepaid phone and an unlimited MetroPCS phone. We still have the STi Mobile phone as backup – it uses the Sprint network. I finally took the full plunge, cancelled MetroPCS and signed up with PagePlus Cellular prepaid for both me and my husband. The savings have been tremendous, we got very feature-rich phones new from eBay, and our average monthly cost is $11 each. I find discount deals on buying time and can’t imagine going back to throwing away money and having a cellular provider hold a contract and termination fee over my head. I think that’s the worst thing about contract cellular – the provider can give you the short end of the stick, such as a new phone that doesn’t perform, and then charge you under threat of ruining your credit report if you don’t pay. As someone who doesn’t feel a need for credit, and having found excellent cellular service at a price that makes me happy, I really feel I am “sticking it to the man”. It’s a great feeling!
I switched over to T-Mobile prepaid about 6 months ago. Prior to that, I had been using AT&T paying about $55/ month. But, based on the usage I had (dropped significantly after it was no longer a work phone), I’ve cut my bill to what works out to be about $10/month.
Best part (other than the savings?) Getting my AT&T phone unlocked so I kept using the device I was used to when I went to T-Mobile.
One other comment on the issue of phone numbers. It’s either difficult or impossible to keep your phone number with a prepaid plan. But I can suggest a solution…
Get Google Voice. The price is reasonable (i.e. free), it has great features, you get to select your number easily, and it stays the same no matter how many cell phones (or land lines) you go through.
The trick with Google Voice is getting an invite. I got mine in about an hour by buying an invite on eBay for about $2.
Mark
I was able to port my number from MetroPCS to PagePlus, but also like Google Voice to protect our real phone numbers from unwanted callers. Google Voice gives a lot of control to its users. Control is good when the Do Not Call list is useless, and also to get rid of political and charity callers.
I just cancelled my Verizon Wireless family plan that was costing us close to $90 per month. I switched to Page Plus Cellular (using the same network and the same phones) and we’re now spending $50. My wife has the Unlimited Talk and Text plan ($40) and I use about 150 minutes per month (about 6 cents per minute). I rarely use my phone, but now my wife can talk all she wants and doesn’t have to count minutes or avoid using the phone at the end of the month. It’s awesome.
About porting your number… I had some problems, but I was able to do it. The number portability regulations don’t discriminate against prepaid phones.
After our trip to Europe I was interested in switching my normal cell phone to a pay-as-you-go cell phone. I found out that you cannot port a number from a normal cell phone to a pay-as-you-go cell phone but you can port a pay-as-you-go phone number to a regular/normal cell phone plan.
Martha, that information is incorrect. I ported my number from a “normal cell phone” to a “pay-as-you-go cell phone”. I did change providers, though; from Sprint to Boost Mobile.
I’m using a SingTel prepaid SIM card right now in Singapore and love it! I can call locally and send text messages back home to the states for pretty cheap (S$0.08 I think, or US$0.06).
I would be willing to switch, but I don’t have a home phone. I don’t know if I would feel comfortable enough to just have a prepaid cellphone.
Americans pay a ton for their service for several reasons. The big two are:
1) In Europe and most of the rest of the world, the CALLER pays a per minute premium for calling a cell number, while the owner of the mobile phone doesn’t pay at all. This equates to lower mobile phone bills if you don’t make many outgoing calls.
2) Americans demand subsidized phones, and the US telcos build the phone cost into the plan. Swapping phones and carriers is far easier in Europe because of this.
I don’t talk much on the phone, so I use prepaid exclusively. Currently I have the T-mobile pay as you go service, $0.10 = 1 minute. There are no extra fees and surcharges on top of this (unlike contract plans).
Luckily T-mobile’s new plans mostly do away with the subsidy idea. They’re now promoting a 0% interest 20 (22?) month payment plan that can go along side some plans, but I think it’s best for us Americans to get over the idea of subsidy…
I lived off of T-Mobile’s Prepaid plan for the Sidekick which was $1/day for unlimited web, text, and IMs and $0.15 per minute/call for 4 years. Only spent about $40 plus I got discounts and points for purchasing my refills online.
That was when I was tight on money. Now, with steady income, I of course went with the iPhone.
Sorry to partially sidetrack the comments, but if anyone could give specific instructions about how to transfer my number from AT&T to any prepaid plan then I would be ecstatic. I would love to stop paying $75 a month to these behemoth cellphone companies but I haven’t been willing to lose my number.
When I left AT&T, I just followed the number porting instructions on T-Mobile’s site. Whatever you do, do NOT cancel the old account until after the porting is done.
My process was painless and took a few days during which I carried two phones until both incoming and outgoing were on the new SIM card, at which time I just put the new SIM in the old phone.
Hi Matthew, I had the same interest, however after lots of phone calls with AT&T it does not seem possible.
That’s not correct.
You needn’t ask AT&T’s permisssion to port the number. Your new provider handles the request.
If you switch to Straight Talk, for example, it’s done on the website. Easy!
Matthew, you would need to call the provider you want to use for information. PagePlus has this page – http://www.pagepluscellular.com/Online Store/Activate.aspx – but that’s not how I did it. You’d need a phone for your new service, in the case of PagePlus, a Verizon capable phone. You need to provide the ESN number of the phone where you want the number associated. I did mine by calling PagePlus customer service, and it was a bit difficult because I was supposed to know a pin code from my previous carrier. I didn’t know it, but managed to get the porting done anyway. To buy time, I use either BabbleBug or CallingMart – because the latter will match any price you find elsewhere.
Great post!
Americans are getting into prepaid for two reasons: the economy (duh) and growing awareness (like yours) that signing a contract to use a cellphone is nuts!
It makes so much more sense to buy a phone and pay up front for minutes, texts, data etc., then “top off” when you need more.
TracFone is the least expensive way to own a cell phone in America. You can buy a TracFone for as little as $10 and pay as little as $20 every three months ($80 a year) to keep it active — without a contract!
Since it’s prepaid, there’s no bills, overages or surprises. Decide how much you want to talk and text, buy Airtime and you’re all set and in control!
If you talk a bit more, Net10 might be for you; 10c a minute to talk, and texts are 5c.
If you’re more of a volume dealer (LOL) Straight Talk could be your best choice.
You buy a phone and then one of either two 30-Day plans: All You Need is $30 and includes 1,000 minutes plus 1,000 texts plus 30MB of data (about 350 Web pages.
Unlimited is $45 and includes Unlimited minutes, Texts and Mobile Web access, nationwide, anytime.
With either plan, 411 calls are included at no additional cost.
There are no per-day fees with Straight Talk, Net10 or TracFone, btw.
Straight Talk is available at Walmart throughout the country and online at http://StraightTalk.com/ShopPhones
hey there i wanted to know if you could help me as i cant seem to find the answer for this anywere.I have a straight talk prepaid phone now in which i had my number switched to from my previous verizon.I would like to now purchase a tmobile prepaid sim to use in an unlocked gsm phone and need to have my straight talk number transferred to the brand new sim card.is this possible??t mobiles transfer site says the number is eligible,but im not sure if that applies to prepaid plans?
I use a T-Mobile prepaid phone with 1,000 minutes a year for around $100. You can carry over unused minutes if you renew before the year ends. It’s been great for my husband and me.
I use Virgin Mobile. Works great (it’s the Sprint network- so wherever they have coverage).
I used to pay $15 every 90 days to keep account activated (and got about 50 mins a month). About a year ago I started buying minute packs (200 mins for $20). Minutes roll over to the next month as long as you buy another pack.
With the extra minutes I was able to drop my land line, and ported my home number over.
VM also has regular monthly plans at reasonable prices with no service contract. You can change plans at anytime, but I think there is a restriction that if you switch from prepaid to monthly you can’t switch back.
Hey Darin,
There are no penalties or restrictions for switching between any prepaid plans at Virgin Mobile. So at any time, you can switch from a minute pack to a monthly plan, or even to the Basic $.20 a minute rate. Its up to you.
I hope this helps clarify and thanks to all who recommended Virgin Mobile service!
SA @ Virgin Mobile
I’ve been using a prepaid cell phone for a few years now. I spend approximately 150.00 a year for usage. I bought it strictly for emergencies. I am using T-mobile and so far it’s been great. I travel frequently within the U.S. and simply buy minutes as I go along. I wish I had purchased an unlocked phone to use when traveling outside the country. My husband has one and uses it when traveling for business.
Also, the more frequently you use your account the lower the price per minute for phone calls.
The only downside is I don’t text or have internet service.
If I had kids, I would definitely have them on a prepaid phone. This would just be sure to limit their minute usage on a phone and prevent huge cell phone bills.
Isn’t that the hard part, prepaid plan or otherwise?
Check out Straight Talk at Wal Mart. $45/month gets you unlimited calling, texting, web and 411.Pay as you go seems to be catching on.
My wife and I have a pre-paid cellphone through AT&T. We basically use the phone as a glorified pager, because I work in multiple labs and classrooms on campus. I’m not always near the same phone, but I can get to a phone when I need to generally, but we still end up with an emergency cellphone if we need it.
We got the 25¢ per minute plan, which is cheaper for us than the $1 per day of use plus 10¢ per minute that AT&T offers (similar to the T-moblie plan) We buy $25 dollars at a time — the minutes expire after three months, UNLESS you recharge the phone before the expiration and then you carry the minutes through the next three months.
My wife’s family lives in Canada, while we are in the States so it’s hard to find a cellphone plan that can give us cheap long distance to her family. For us, a land-line with calling cards for long distance, and this pager/cellphone system are cheaper than my wife ever paid for previous cellphone plan. We control the input of how much money to each service, and they kindly remind us how much we’ve spent with each call. This is much easier to monitor than some of those outlandish roaming and overage expenditures that can happen with the overwhelming majority of cellphones.
I hope that there is a day when the consumer doesn’t have to work so hard to not get strangled by cellphone providers. Why do we have to commit so much extra money for them to take our regularly monthly payments?
I have been using AT&T (and previously Cingular) pre-paid service for a few years now. I don’t do a lot of talking (less than 100 min/month) but text/email daily and use web/GPS about 2-3/week. I use the 25 cent/min plan b/c of my low voice usage. Because I only pay for what I use, and I buy a text package every month (200 text for $5), I average about $25/month in costs.
PROS:
Cost!!! Voice quality is good – better than my former Sprint, Nextel & T-Mobile phones, and far better than my friends with iPhones. Data/web is over 3G and in some places 3.5G network so it is fairly speedy. I pay for what I use, and don’t have to buy unwanted minutes or data. I can buy more minutes whenever I need them and there are no overage charges. Minutes are good for 90 days (a year if you buy $100 at a time) and they roll over when you buy more credit. An unlocked phone gives me freedom to switch carriers in US & abroad, and lets me use all of the features of the phone (GPS, radio, MP3 player, wifi, web browser, email, etc.) without paying carrier surcharges and without preventing me from downloading my own software.
CONS:
No international roaming (other than Mexico), so I have to buy a local SIM card & pop it in my phone in Europe. There are few carrier options for GSM prepaid (I must use GSM b/c I travel a lot & the non-US/Canadian world uses GSM) so I’m essentially stuck with AT&T to get the pay-as-you-go data access, as I understand TMobile doesn’t let you use data if you are on a pre-paid plan. That’s it for cons.
I have a prepaid phone with an air time card as back up. Neither I or my son play nicely with our phones.
I have t-mobile Pay-as-you-go with $100 refills to get the 10c/min rate. I don’t talk a lot on the cell. I have my email forwarded to my cell phone – it comes in as MMS (at cheap text rates). I can easily send email by MMS. My cell bill is only about $150 per year. Browsing on a cell phone is never impressive so my Cell-Phone/email “plan” works fine for me.
For the glued-to-the-phone type this “plan” would not be best.
I’m very happy with Straight Talk and am impressed with their coverage on Verizon.
To me, the $30 – 1,000 minutes, 1,000 texts deal is unbeatable. I travel a lot and have never had a problem.
When I had Metro POS, it worked fine in town but as soon as I got outside the city, fuhgeddaboutit!
You get what you pay for, or in the case of Straight Talk, MORE than you pay for!
i just got straight talk it has very good coverage where i live in n.h and i get a thousand minutes of talk and a thousand minutes of texting, allso 30gb for internet, though i haven been abil to acess that yet, but to be honest sprint does not have good covarage in n.h and you get a lot of droped calls but straight talk is on the verizon net work,
i wanted to ask mark baldwin what is google voice as i never heard of it before thanks moe
Google Voice is a new free service that offers all sorts of phone features. You can find out more at http://www.google.com/googlevoice/about.html.
Mark
I have Straight Talk. I previously had Verizon then switched to AT&T but the bills were CRAZY!.
When I heard about Straight Talk I couldn’t believe it but got it from Walmart and have had it now for 2 months and it is just sick! I’d heard that it was on Verizon and the coverage is rock steady, so yeah!
My husband & I switched to StraightTalk. We each pay $45/month for unlimited talking/texting and figure we’ll be saving about $1000/yr!!!
I have Straight Talk. I previously had Verizon then switched to AT&T but the bills were CRAZY!.
When I heard about Straight Talk I couldn’t believe it but have had it now for 2 months and it is just sick! I’d heard that it was on Verizon and the coverage is rock steady, so yeah.
Straight Talk is simply amazing. The best prepaid plan around HANDS DOWN. I seriously am saving over $500 a year just from switching to this from my monthly contract. I pay $45 for Unlimited calls and texts, plus its on the Verizon network so I get awesome coverage. I do majority of my shopping at Walmart now to save money so it was perfect that Walmart sells Straight Talk exclusively nationwide. I reccommend this plan to anyone trying to save money the smart way
Thanks for the article. I’m moving to the UK later this year (where my Verizon phone will NOT work), and will probably end up getting a PAYG phone when I’m over there. I don’t talk on the phone very much at all, but I text like nobody’s business. Are there PAYG programs that have good texting packages?
I agree with everyone that commented about Straight Talk. I have it myself, and I love it. I am always astonished that I get such a great prepaid plan for such a little price. I mean, $45 per month for unlimited calls, texts, and data is amazing! I also love how it runs on Verizon’s network, so I never worry about an important call dropping. I recommend everyone to try Straight Talk.
I got a net10 phone after I lost my iphone and I Loved it ever since. With no contracts and no bills there is No Evil. Literally.. I am saving soooo much money and have a great phone. What more would I need? I got the Motorola EM326 and it has games, web, just everything I could need. I spend like 30 dollars a month on my phone a month at most which is a far cry from that ridiculous over 100 bucks I used to spend!
I live in the U.S. Switched two phones to prepaid in Nov. & Dec. 2009. For me, prepaid mostly means I don’t have to agree to a 1-2 year contract and/or pay after I use the service. Big deal! On one phone I get unlimited voice, text and web browsing for $45. On the other I get 1000 voice, 1000 text and 30mb web for $30.00. I get a major network (Verizon) on a Tracphone (prepaid) service with phone bought only at Walmart. It is called StraightTalk. Seems some folks ssem to think the “snob appeal” is more important than a good deal.
After years of contract, I finally made the switch to Net10 and am very happy paying $15 a month with their easy plan. The coverage is great and since I’m not a heavy user the plan suits me just fine. The icing on the cake is I also got my phone for free since all Net10 phone comes with 300 minutes and two months of service upon activation.