Prepaid Cellular Phones

Once pricey options for the credit challenged, prepaid cellular phone prices have come way down. As their costs plummet and options improve…text messaging, ring tones, and even games…prepaid cellular phones are viable alternatives to restrictive two-year contracts.

In addition to saving you money, prepaid cellular phones are also a good way for new users to try before they buy. Senior citizens, notoriously slow technology adopters, may appreciate the simplicity of prepaid cellular phones, while teens buying a first cellular phone can learn the responsibility that comes with it without running up a tab. And parents paying for their kids' cellular phones can limit their use.

Prepaid cellular phone plans are just what they sound like. Prepaid cellular 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. You buy a "starter kit" at a retailer such as Best Buy or Circuit City. You then pay for airtime up front…when you run out of minutes, you buy more.

Prepaid cellular phones, unlike their more conventional counterparts, do not require a commitment to a monthly service plan. If you decide you no longer want the plan, simply let it expire. Prepaid cellular phones are of substantial interest to users who might like to have a cellular phone for occasional use--say…the unexpected roadside emergency. But if you just want to have a cellular 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 cellular 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 glove box 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.

Choosing the best plan can be tricky. There are many variations, and no carrier offers a clearly superior deal. Most charge from 10 cents to 60 cents a minute. With some accounts, daily access fees also apply. Such plans usually offer lower per-minute rates, which might be good for the chatty. But watch out for expiration dates. Some carriers make you add minutes or cash each month to keep your account active. Others compensate for higher per-minute rates by offering free or discounted minutes during off-peak hours. Many include fees for roaming, international long distance, text and multimedia messages, and downloads of games and ring tones.

As with traditional plans, consumers should read the fine print. But unlike their predecessors, todays prepaid cellular phone plans won't have you forking over your life savings for talk you thought was cheap.