Prepaid Cell Phones – Are They Worth It?

by Frugal Brian

cell phone

Monthly cell phone bills can get really expensive. Cell phone companies add on taxes and fees to your bill every month. And unless your company rolls over your extra minutes to the next month, you are paying for minutes even if you do not use them all. A prepaid cell phone can be a good alternative to a cell phone contract. Depending on your needs and phone usage, a prepaid cell phone may be a better option for you.

 There are some that will most benefit from a prepaid plan though. Parents of teens can use prepaid cell phones as a way to keep cell phone costs under control. Also, parents of younger children with after school activities can purchase a prepaid cell phone for their child to use to contact them when it is time to go home, or in case of an emergency. Prepaid phones are also good for elderly people, or just anyone in general, who just need a phone for emergencies only.

 There are some benefits to having a prepaid cell phone as opposed to a contact phone plan. With a standard cell phone contract, you are locked into a service plan that can last anywhere from one to two years. If you need to get out of the plan before that for any reason, you can face up to hundreds of dollars in fees and penalties. With a prepaid cell phone, there are no contracts. You simply pay for the minutes you expect to use on your phone.

 Most contract service providers require a credit check before opening an account. For those with either no credit or bad credit, a prepaid cell phone can work to their advantage because they do not require a credit check to obtain.

 Prepaid cell phones are also a good option for those who can only afford a certain amount each month. Instead of paying a high monthly bill, you can set your budget each month.

 While prepaid plans are cheaper than contract plans, be aware of extra costs. Keep in mind that checking voicemail will eat up minutes. Also, if you do not have text messaging included in your plan, then receiving or sending texts often costs money per text.

 With all these things to consider, how will you know if you will benefit from a prepaid plan versus a contract plan? In general, people who talk 100 minutes or less in a month will always come out ahead with a prepaid plan. For most others, you will have to weigh the options and see just how much you talk on the phone in a month. Also, be aware that some carriers will charge a small daily fee.

 In addition, if you do not need any extra applications or functions on your cell phone, then it is a wise idea to look into prepaid. Smartphones normally require a data plan, which can add about $30 extra to a monthly contract bill whether they owner uses all the functions or not.

 If you have a family plan, you might be better off staying with your contract. You will have to compare use per line, and any data add-ons. If you are diving minutes between four or five family members, then it may come out cheaper just to stay with the family plan as opposed to getting each person a prepaid cell phone.

 If you are considering a prepaid cell phone, be sure to compare providers. The big name carriers offer prepaid plans, but smaller and lesser known providers tend to have more pricing options. Also, different providers offer extended coverage, depending on their partnerships with other local providers.

 Once you decide on a provider, you can decide on how many minutes you need. Most companies will offer plans with different amounts of minutes.

 Some providers will allow you to bring in your own phone, so check with them on that as well. If you do use an old phone though, make sure it is not linked to another account and be sure that it is compatible with the service of the prepaid provider.

 Also check on the calling area. Often times, it tends to be smaller for prepaid customers than it is for contract plans. Ask the provider how much each minute outside of the calling range will cost you. If you travel often outside of the calling area, then a prepaid phone probably isn’t for you.

 Prepaid cell phones can be a great option for those who just need a simple cell phone to use every now and then. If you rarely use a cell phone, do not need any extras, or possibly have bad credit and cannot get a cell phone contract, then it is worth looking into getting a prepaid phone.

{ 3 comments… read them below or add one }

rosie November 29, 2010 at 4:34 pm

We’ve saved a fortune since we dropped our contract and went with Tracfone and we don’t feel the differences at all! We each have a cool up-market phone, we get double the minutes we pay for when we buy airtime, free incoming texts and overseas calls for the same price as local calls. National coverage means we can use our phones anywhere in the US and we always get good reception!

sam November 30, 2010 at 4:56 pm

I think that good, old tried and tested Net10 is still such good value for money for someone who likes to stay on top of their expenses call by call! 10c a minute and 3c a text is affordable for most people and the fact that the phone comes with 300 free minutes makes for a good start! The coverage is so good I’ve never had a dropped call and the reception is also very clear!

Ellie January 17, 2011 at 3:31 am

Straight Talk is the best! I recommend it to everyone who wants to try out prepaid phones. I pay $45 a month for unlimited minutes, text, and data. Such a great deal, I’m saving lots of money!

Leave a Comment

Previous post:

Next post: