Cell Phones: Prepaid Or Calling Plan?

With the shenanigans that go on with automatic billing, I have been giving serious thought to switching to a prepaid model with as many services as possible. The most obvious place to start would be my cell phone, so I looked carefully at what it would cost to switch to a prepaid model with T-Mobile.

In a given month, I currently use about 400 whenever minutes, about 5.8 megabytes of bandwidth (mostly e-mail), and send and receive about 140 text messages. For that, I pay about $68/month for a Blackberry minutes and mail plan.

If I wanted to go prepaid with T-Mobile, I would have to switch to a Sidekick to get internet and e-mail. 400 minutes would cost about $50. Unlimited e-mail is another $1/day, or about $30/month. Text messages are $.10 to send, $.05 to receive, or about $21/month.

So at my current usage, I would spend $101/month for the equivalent usage (not counting the cost of purchasing a Sidekick). Without the internet and e-mail, though, the cost of switch would only be about $4/month, plus the new handset. Not bad.

If you don’t use internet and e-mail on your phone, it might be worth it to switch to a prepaid system, which gives you freedom to change providers whenever you want as well as the freedom from “surprise” charges. Plus, then you can bug your parents for minutes for your birthday instead of another useless 32MB flash drive. SAM GLOVER

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  1. mantari says:

    Cricket: Prepaid flat-rate. Even better, where available. (Still subject to the usual complaints about cell phones, reception, etc etc.)

  2. TheSeeker says:

    I am not a big phone talker…so I use Virgin Mobile.
    With on line “topping up” it only costs me $5 per month…$15 for 3 months and I always have money/time leftover. Calls are ten cents a minute.
    Oh, and the phone was free when I ordered it online from virginmobileusa.com

    There are other plans but this is the lowest priced and best for me.

    Like I said, I am not a big talker…its for things like if the car breaks down, or if I am at the store and I call home if we need more Chinese poisoned food.

  3. polarogak says:

    Prepaid phones are waaaaay more trouble than they are worth, IMHO. Unless you are saving a boatload.

  4. enm4r says:

    I think the cutoff when I ran the numbers myself was about 400 or so minutes. If you’re above that, you’ll probably save with monthly plans. But if you’re just using 100 minutes or so, might be worth it to run some numbers. I have a problem with the pointless fees though, such as $1 a for each day you use your phone, etc etc, that vary for each provider. I’m a lower/moderate cell phone user, and I would not have saved.

  5. Trackback says:

    [Consumerist crosspost] With the shenanigans that go on with automatic billing, I have been giving serious thought to switching to a prepaid model with as many services as possible.

  6. Sasquatch says:

    In my wireless experience (I used to be a wireless sales rep, or as I like to call it, “my journey into purgatory”), the companies have very little incentive not to treat their prepaid customers like second-class citizens.

    Lost your phone? Too bad. Buy a new one at full retail price, or be willing to get a new phone number.

    Security? None to speak of. If someone wants to hijack your account and reassign a new SIM to your old phone number, there’s little you can do about it, unless you called customer care and put a PIN on your account to prevent unauthorized access.

    The advantage of this type of account is that you have complete privacy. If you come into a store to get a prepaid phone, they very rarely ask for any ID or information from you. Provide your name and birthday, and you’re good to go. But they don’t check it, so feel free to make up a random name if you’re one of those “tinfoil hat” types.

    Still, among pre-paid carriers, T-Mobile is probably the way to go. There are no connection fees. You just have to be sure that you’re adding on minutes before your expiration date, or all your minutes disappear on you. Also, the coverage is spotty at best, as the prepaid service has no roaming agreements. Great for living in the city on a budget, though.

  7. balthisar says:

    I’m a low volume user; my rollover minutes have been at maximum since about six months after signing on five years ago or so.

    Last time I looked into it, though, prepaid minutes were way more expensive on a per-minute basis unless I were to buy a whole lot of minutes. I wouldn’t have a problem buying a whole lot of minutes, but they expire unless you buy additional minutes. I figure I’d still have the same rollover accumulation, except it’d be in pre-paid minutes I’ll never use instead of rollover minutes I’ll never use.

    Yeah, it’s my main phone; no land-line in years.

  8. tadiera says:

    I myself use prepaid. Because some months, I use more minutes than others. And the most beyond phone itself that I use is text messaging- which is included.

    I like T-Mobile’s prepaid. I get more minutes for my buck than I do with other plans. And I usually only put $30/month on it. No contract, etc. :)

  9. leejames says:

    I’m a low user (monthly less than 100 minutes and a handful of text/picture messages; no email) and most of the prepaid plans I looked at didn’t really save any money.

    Some companies charged a dollar a day just to have your phone on. That’s before any minutes or messages. And if you buy minutes, most of the time they eventually expire.

    I’d much rather pay the steady $40 a month for the 400 minutes and skip the hassle.

  10. RandomHookup says:

    I am a very low volume cell user and switched to pre-pay when I got a free-with-rebate phone from Staples. I spend less than half what I did with Cingular’s bottom-line plan and I got to keep my old cell phone number.

    My only complaint is the 20 cent per day fee they added shortly after I got it, but it’s still much cheaper for me.

  11. pinkbunnyslippers says:

    I think the concept of the pre-paid phone wasn’t to market toward “low volume” users, but rather those users who weren’t able to secure a regular cell phone due to poor credit, etc.

    IMHO, don’t even bother with pre-paids unless it’s a junk phone you keep in your glovebox for emergencies or something and you’ll very rarely use it.

    Any product that was developed with lower income/lower credit consumers in mind isn’t going to suit the average joe looking to save a few bucks.

  12. Pdawg says:

    I’ve had a prepaid phone from T-mobile for 2 years now- had no problems at all.

    Once you spend $100 on refills, you minutes don’t expire (in any timeframe that would ever effect me) and there is no daily fee like some others.

    Not being able to roam does suck when I really need to make a call, and you can’t get cool phones, but it sure beats getting screwed with a contract.

  13. tizzed says:

    Wow. Lots of hate for pre-paid?

    I am another very-low volume user (way less than 100 min/month) and I purchased a virgin mobile plan. Minutes are 18c, and I pay $20 for pre-paid minutes every 3 months to keep the account active. Easily the cheapest plan I found if you use your account very sparingly, although I think they can compete with t-mobile and monthly plans in the above scenario as well.

    A friend who turned me on to virgin mobile remarked that it is goofy that the company seems to market to teens when they should also aggresively market to just about anyone that uses a cell phone.

  14. bowersst says:

    The sidekick plan that is referenced in the article does not charge extra for text messages. The $1 per day charge is for the all sidekick data (email, text, IM, web browsing).

    If you do a lot of text messaging, it could be cheaper to go with a prepaid sidekick.

  15. lilyHaze says:

    Back when I was in college, I got a pre-paid TracFone. The phone was practically free, and I think ended up using it for a good two years (paid a total of less than $150). It was more of an emergency phone (when I was driving alone). It worked well for me.

    I’m still a low-volume user, but it’s my only phone now.

  16. flugangst says:

    @tizzed: You took the words right outta my mouth.

    My job involves a lot of travel and I’m frequently out of the country for a month or more at a time. I’d previously had an account with Verizon on a bare-bones plan (300 minutes, I think, and about $40/month). It was perfectly fine for when I was around, but I didn’t travel with it and it just sat there when I was gone. There would be at least 4 or 5 months a year when I would use 0 minutes.

    I looked into prepaid plans and ended up joining up with Virgin. The only up-front cost was $40 for a new phone (they do offer nearly free phones on their website, but I was impatient) and $20 for an initial chunk of airtime. My number was ported from Verizon within an hour. I’ve been very happy with the service – coverage is good, customer service is quick, and I’ve so far only spent about $60 on airtime in 6 months (which would’ve cost me $240 with Verizon).

    My only complaint is that the phones are heavily branded and come with few options (ringtones, wallpapers, etc.) – surely they want you to buy them from their website at $2.50 each. I believe my phone only came with 2 ringtones, one of which consists of someone screaming “Pick up the phone!!!”. Ugh. Also, call forwarding is not available for Virgin numbers.

    Do shop around for prepaid plans as some of them are really crappy – I believe Verizon charges you $1 a day even if you don’t use the phone, so you would easily exceed the cost of one of their basic contract plans if you made even a few calls.

  17. hoosier45678 says:

    No question that service sucks with prepaid (the storefronts don’t want to know you, and you can’t buy an itemized list of calls), but the price difference can be huge. Buy a $100/1000min/365 days card from T-mobile and all future top-ups… even the $10 ones… will keep the ball rolling for another year. Definitely worth the once a year hassle of buying a top-up to save 70+% off the phone bill.

    Before I moved out of T-Mobile’s area, I only used about 40 minutes a month… Amortized over 3 years, it would have been less than $6/month, including the phone.

  18. kellyd says:

    I can’t say enough great things about Virgin Mobile. I use their 18 cents/minute plan. I talk as much as I want and never pay for minutes I didn’t use. Topping up once in three months is not hard to do no matter how little you talk. I got a really cool phone from them–my friends think it’s an LG Chocolate but it’s what they call a slice. It’s super slim and very reliable.

    Coverage is GREAT! I had a nextel phone before and could never get reception in my office or my home. Even though Virgin Mobile contracts with the Sprint network (which I think is the same as Nextel’s), I can use my new phone (three months new at this point) in places my other one never got reception.

    I also love the quirky teen-targeting. The site is fun and the service has always been great. There is no charge (like others mentioned a dollar a day) for my phone unless I use it, and then it’s just 18c/min. I have it tied to my credit card, so when I need more minutes, it automatically adds some in the increment I select and lets me know that it’s done so.

    Virgin Mobile is the best phone plan ever, especially if you’re low volume. Give them a try–it’s so cheap, you won’t care if you decide not to stay with them.

  19. Lebo (in exile) says:

    My wife and I have been using T-Mobile prepaid for just over a year. It’s saved us a lot of money. We bought the phones, put about $100 on each, and just recently put another $100 on each. So, $200 a year prepaid gives us all the minutes we need versus the $100 a month we were paying for minutes we didn’t use.

    And about the phones, To-Go phone selection is bad, but you can switch the SIM to any T-Mobile or unlocked GSM phone out there. So if you must have the hottest phone: buy the cheapest To-Go phone, buy a retail phone, activate the To-Go SIM and put it in the retail phone. Hold on to the To-Go phone for the day your dog eats the retail phone.

    I believe pre-paid is the more common option in Europe, it’s just the cellphone companies have Americans suckered into buying into the high profit post-paid plans with either too many minutes or, better for them, too few minutes (I bet they love overages).

  20. lonelymaytagguy says:

    When you add minutes, T-Mobile always rounds the average per-minute rate down so you almost always get more than the card’s face value.

    My phone is at 10 cents per minute, that is at one time I put in the $100/1000 minute card. As long as there’s more than 625 minutes in my account, a $10 refill will give me 100 minutes and keep the 10 cent rate. Face value on a $10 card is 30 or 35 minutes.

    Refilling is not a hassle at all. You can dial *ADD and buy minutes with a credit card, and once you’ve done that, future refills can be done through T-Zones on the phone’s browser — usually takes about 40 seconds.

    And as said before, once you buy $100 of refills (doesn’t have to be at once), even a $10 refill lasts a year. Hardly a lot of bother.

    You can get the Nokia 6030 kit at Wal-Mart or T-Mo online for $30.

  21. asplodzor says:

    @kellyd: Virgin contracts with Sprint CDMA network which is competely different from Sprint’s iDEN network (formerly Nextel). There is absolutely no similarity even in the way that the phone communicated with the tower, much less the frequency, type of radios used, range, service area, etc.

    That being said, I am still of the opinion that Sprint’s $30/month SERO contract plan is the best plan avaliable for any low-minute phone use.

    I should qualify that by saying that I am comparably an extremely high-minute user. My total usage per month including all my free minutes generally ranges somewhere between 2500 and 3000.

    This makes sense because I am college age, have no landline, the majority of my lifelong friends are abroad, and my business requires a significant amount of phone correspondence. Circumstances will differer but I couldn’t be happier with my 1250 anytime minute SERO.

  22. oldbluebox says:

    Excpet they fail to mention that the coverage area for prepaid phones is less than actual post paid accounts.

    Meaning, yeah sure you might save money, but your coverage sucks.

  23. oldbluebox says:

    Excpet they fail to mention that the coverage area for prepaid phones is less than actual post paid accounts.

    Sounds crazy but it’s true.

    Meaning, yeah sure you might save money, but your coverage sucks.

  24. a_m_m_b says:

    Prepaid would be nice *if* it came with the pda/pc phones I prefer. I live & die with my cell. That said, I’ve actually had a good experience with Sprint for the last 8 years. . .here’s hoping it stays good.

  25. lincolnparadox says:


    Net10 is nice for me. I pay $32.10 a month for 300 minutes. Every month, that 300 minutes stacks on another 2 months of “service.” Basically, so long as the phone is active, you won’t lose your number, but there is no fee. You just have to continue to buy minutes at least once every 60 days. Since I burn through about 300 minutes every month, I’m always at least 2-3 months good for service.

    You can get refurbished phones on their website and you can buy minute denominations from 150 mins for $15 on up.

    It’s not perfect. No internet connectivity and IMs cost 0.5 mins, but if you just want a talkin phone with no chance of hidden fees, it’s the best on the market. IMHO

  26. FLConsumer says:

    One other thing: Many pre-paid plans won’t allow you to port your number to another carrier. Found this out when a friend tried porting her Cingular number to Alltel. Cingular refused to release the number.

  27. layman says:

    Here is a website that has a great comparison of the best prepaid plans. Basically there is a prepaid service that will address everyones complaints so far.

    http://cellguru.net

    –There are prepaid providers that let you roam
    –There are prepaid providers that have minutes that don’t expire ever if you are worried about the hassle of refilling.
    –For those who want prepaid PDAs, just go with a prepaid GSM provider and get a GSM PDA and swap the sim cards.

  28. Papa Midnight says:

    Here are my principles…

    I have a computer for internet / web browsing / everything else

    I have a camera for pictures

    I have a phone for phone calls.

    So in terms of pre-paid plan, I’ll tell you one thing, stay away from Cingular, but others aren’t that bad…

  29. jerseyjokeboy says:

    I use Cingular pre-paid and I’m happy with it, since I don’t use my cell that often. I started with Cingular’s post-paid, $40/month plan. That turned out to be a waste of money for me, because most months I would not use my cell that much. So I looked into pre-paid. With Cingular, minutes last longer than with T-Mob or Verizon. $50 will last you about 3 months if I’m not mistaken. You will pay 25 cents a minute for calls and 5 cents for text. I’ve been using this for about a year and I am yet to see any unusual/hidden charges mentioned by others here.

    While on this plan, I also looked into TracFone and Virgin. I actually got Virgin (18 cents/minute), but the coverage was awful (I’m in NJ, close to NYC). TracFone is the cheapest, but read the small print closely. It said that you can’t sent international texts, which I do every now and then. Plus, I’m not sure about their coverage area. Thus far, my Cingular pre-paid works the same as my post-paid plan before.

    I have to say though, Cingular customer service was reluctant to let me switch to pre-paid and keep the number. They gave me the run-around for a few days, but everything worked out fine eventually. Keep in mind that if you’re on pre-paid, you pay full-price for a cell phone. May as well look for unlocked, unbranded ones on Ebay once you have your sim card.

  30. smackswell says:

    The sidekick plan for you would be this:

    400 minutes * $.15(SK flat rate)= $60
    Text, IM, internet, email @ $1/day = $30

    If you were to reduce your talk time by doing more messaging your expense would be reduced drastically. Couple that with no contract and the fact you could get a used SKII, it shapes up into being more viable than it looks at first glance.

    I myself have been considering thumbing my nose at voice calls entirely. As soon as i see a SKII for the right price i’m goin for it. $30 a month for wireless communication? THATS frugality.

  31. WestCincinnatGuy says:

    I use a Cricket phone-They are initially somewhat expensive-around $100 for their cheapest phone, but that does include the first month’s serivce and each month’s service including tax is about 61.00, prepaid. For my prepaid, I get unlimited nationwide longdistance calling and text messaging. The phone is a nice model and has more features than I use, but doesn’t have a picture phone. It does serve my needs and I don’t have to worry about counting my minutes or having a variable expense. My first cellphone experience a few years ago was a not a prepaid and it was much more expensive. I really recommend Cricket.