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Prepaid or Pay-as-you-go Wireless

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The Bottom Line

More expensive than standard wireless, a prepaid plan might be an option if you don't want to sign a contract or if you have credit issues.

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Interactive Prepaid Plan Finder

Prepaid service is one of the fastest growing areas in wireless, as carriers are using it to reach new subscribers, including students and emergency-only users. A prepaid setup offers the opportunity of going wireless with no contract, no credit check, and no commitment. You might want to consider pay-as-you-go wireless if you:

  • Don't want to sign a contract
  • Have credit issues
  • Want to budget yourself or a family member
  • Only want wireless for very limited emergency-only purposes

There are a large number of prepaid programs on the market, but each generally falls into one of two main categories:

  • Pay-As-You-Go
    With this more traditional form of prepaid, you buy the phone and use refill cards (physical or electronic) to add airtime as needed. This is best if your usage varies from month to month, if you are on a budget, or if you want to provide service to, but limit the talk time of, another family member (e.g., a child).
  • Pay Monthly (Hybrid Prepaid)
    Hybrid plans are more like a traditional postpaid offering, with a recurring monthly charge. This type of plan is best for those whose usage is fairly consistent from month–to–month and who want a traditional service, but have credit issues or don't want a contract. Rates are higher than for contract plans, but lower than for pay-as-you-go.

Prepaid wireless has two main disadvantages. First, although prepaid per-minute rates have come down, they remain significantly more expensive than with traditional postpaid service. Second, since the carriers don't offer as many price subsidies for prepaid, the phone you will buy is much more expensive.

Prepaid Tricks
Some carriers impose a daily access charge on some of their pay-as-you-go programs. Additionally, all airtime refill cards expire after a certain period of time. These facts mean that your effective per-minute rate can be very high. The CellCalcTM tool for pay-as-you-go helps users find the right plan and the optimal airtime refill card to buy.

Also, be aware of what we call the “soft commitment.” While prepaid plans have no contract, sometimes the phone rebates associated with the programs require you to maintain service for a certain amount of time. In a sense, you are obligated for that period should you want to take advantage of the rebate.

Prepaid Portability
Prepaid phone numbers are generally* portable, as number portability is independent of the type of plan you have. However, to be portable the number must be in your possession — meaning that your prepaid account must be active. Since prepaid airtime is bought in advance, you will likely forfeit any unused airtime remaining on your account at the time the port is completed.

*Some carriers have chosen not to accept number transfers for prepaid accounts, while others won't allow the transfer from another prepaid account. While carriers can't keep you from taking your number, there is no requirement forcing your new carrier to accept your number into their service.

In an Emergency...

Many people would like to get a cell phone to throw in their car just for emergency use. Unfortunately, it isn't profitable for a wireless carrier to have active lines not generating any revenue, so obstacles are created — like airtime card expiration periods — to force subscribers to pay up periodically to keep service active.

The trick to spending as little as possible, while maintaining service for an emergency, is to find the lowest value refill cards that offer the longest expiration periods. For our opinion on the best current options for emergency only cell phone service, click here.