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I think I know what I'll get my mom for her birthday this year (Mom, stop reading now if you don't want to know!): a prepaid wireless phone.
Prepaid wireless service is an up-and-comer in the wireless phone family. It provides the convenience of a cellular phone without some of the strings that bind regular wireless plans -- such as a contract, a credit check, deposit or monthly bill.
Once you buy the phone, you pay only for the time you use. It's attractive for the right user, like my mom. In fact, several types of people could make good use of prepaid mobile:
- Someone who uses a little airtime each month, perhaps less than 30 minutes. My mom, for example, is the perfect "glove box user" who probably would use a mobile phone for safety on the road and for brief "I'm running late" types of communications.
- Wireless wannabes, say ages 16 to 24, who have no established credit, or adults with bad credit who can't qualify for a regular wireless phone contract.
- Parents who want their teen to carry a wireless phone for safety, but who don't want their talkative teen to run up costly extra minutes.
- Anyone on a budget
Get connected
Most of the big names in wireless offer prepaid plans, which have come a long way from the costly and feature-poor prepaid services of a few years ago. Today the phones are cool digitals, and the per-minute rates typically include nationwide long distance, voice mail, call waiting, caller ID, and, in many cases, roaming and text messaging. (See the box below for a brief review of the plans.)
Starting a plan is just a two-step process. First, purchase a ready-to-use phone available from retailers such as Best Buy, 7-Eleven, Staples, Wal-Mart, Circuit City or Radio Shack. You also can buy the phones online from the phone companies or from resellers.
Each plan requires a specific phone, so you generally can't convert an old phone to a prepaid plan (the exception is AT&T Wireless, which will let you retro-fit phones for its plan). But you can switch from a prepaid plan to regular service with the same company.
Step two is activating the phone using a prepaid airtime card. Because there is no credit check, you can buy a prepaid phone as a gift.
Prices start at about $70, but when you shop look for rebates (sometimes $30 or more). The price generally covers the phone, an accessory such as a hands-free headset, and a starter airtime card that could be worth $25 or $30.
Stay connected
When your airtime minutes run low (by making and receiving calls), you can buy new cards at those same retailers, online or over the phone. The per-minute charges are higher than with the regular plans but "since you don't usually have a minimum per-month or a monthly access fee, your total costs could be less," says Sam Simon, executive director of the nonprofit Telecommunication Research and Action Center.
Because each plan handles per minute charges differently, always decide how you would use your phone before choosing. Your airtime cost-per-minute may decrease as the value of the card increases. But you will have a talk-time deadline. All airtime card minutes will expire at some point. You'll lose minutes you don't lose (along with the money you spent for them). "You are much better off putting in less than you need and adding more later," says Simon.
Some lower-value cards expire in as little as 15 days, but generally cards are good for 30 to 120 days. TracFone offers a $94.99 card good for 365 days (for 150 minutes of calling).
Typically, if you add time before a card's expiration date, your old card's minutes roll over to the new card with its new expiration date. Some Cingular plans, as well as plans from TracFone and Virgin Mobile, will re-instate lost time if you reactivate your phone within a certain time.
If you let your service lapse, you might not get the same phone number when you reactivate.
To see which companies offer prepaid service in your area, check the Web sites below or sites such as Amazon.com, LetsTalk.com or PhoneShark.com.
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