Frugal Living 

Consider Prepaid Cell Phones

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Motorola Cell PhonesWhen 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)

{ 63 comments, please add your thoughts now! }

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63 Responses to “Consider Prepaid Cell Phones”

  1. Matthew says:

    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.

    • Patman says:

      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.

    • Martha says:

      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!

  2. Yana says:

    Matthew, you would need to call the provider you want to use for information. PagePlus has this page – 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.

  3. 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

    • diamondmami831 says:

      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 this possible??t mobiles transfer site says the number is eligible,but im not sure if that applies to prepaid plans?

  4. Christina says:

    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.

  5. Darin says:

    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

  6. A says:

    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.

  7. Patrick says:

    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.

  8. SJB says:

    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.

  9. fishboyridesagain says:

    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?

  10. Alex says:

    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.

    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.

    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.

  11. Chris says:

    I have a prepaid phone with an air time card as back up. Neither I or my son play nicely with our phones.

  12. Paul says:

    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.

  13. Chase Winters says:

    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!

  14. moe says:

    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,

  15. moe says:

    i wanted to ask mark baldwin what is google voice as i never heard of it before thanks moe

  16. Mark Baldwin says:

    Google Voice is a new free service that offers all sorts of phone features. You can find out more at


  17. Pat Yoe says:

    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!

  18. Melonie says:

    My husband & I switched to StraightTalk. We each pay $45/month for unlimited talking/texting and figure we’ll be saving about $1000/yr!!!

  19. Pat Yoe says:

    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.

  20. Laurie Landry says:

    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 🙂

  21. echidnina says:

    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?

  22. Aaron says:

    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.

  23. Mollyyy says:

    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!

  24. Linda says:

    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.

  25. janet says:

    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.

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