Look Carefully at Prepaid Cellular Phone Plans

Joe St Sauver
joe@oregon.uoregon.edu

Prepaid cellular phones are one of the most intriguing recent developments in wireless service. Prepaid wireless cellular service is currently being offered by ATT (http://www.attws.com/personal/prepaid/epw_index.jsp), TracFone (http://www.tracfone.com), and Verizon (https://store.verizonwireless.com/oasys/pp_gstart_new.asp), among others. (We 're not aware of any prepaid cellular program offered by Qwest/USWest at this time.)

Prepaid cell phones are typically very attractively priced. They often cost less than $100 and are sometimes accompanied by deal "sweeteners," such as rebates, a starter phone card for some nominal amount of air time, or a variety of phone accessories.

Prepaid cellular phones, unlike their more conventional counterparts, do not require a commitment to a monthly service plan. Instead, users prepay for air time much as they might buy long-distance phone cards. Prepaid cell phones are of substantial interest to users who might like to have a cellular phone for occasional use--for unexpected roadside emergencies, for example. But if you just want to have a cell phone as "insurance," it can be irritating to pay a conventional cellular telephone bill of $20 or $30 a month, month after month. For this type of user, prepaid cell phones may seem quite attractive.

What those users may not immediately understand is that the minutes they add to their phone "expire" if left unused after a period of time--a period that varies from six months to as little as 30 days, depending on the service. If you 're planning to buy a prepaid cellular phone, activate it with a minimal number of minutes, and then store it in your car 's glovebox until an emergency arises, you 'd better also plan to replenish your minutes on a periodic basis--whether or not you actually use your phone.

Note: Some services allow you to roll over any unused old minutes, as long as you add new minutes before your old ones expire. Many services also always allow you to call 911, even if all your airtime minutes have expired. In any event, if you 're thinking of buying a prepaid cell phone, look carefully at the fine print. Because of airtime expiration policies, you may still end up paying the equivalent of a monthly fee, even if you never "use" the time you buy.

You should also be aware that per-minute charges for some prepaid cellular services can be astronomical, particularly if you purchase small denomination cellular airtime cards, or end up roaming. Most prepaid cellular providers also round off any fractional minutes of airtime used, which can further increase your effective cost, particularly for short calls running just a minute or two.