Do Pre-Paid Cell Phones Save Money?

Interested in Pre-Paid cell phones? Get all the information before you buy

Dear Consumer Advisor,
I recently lost my job and need to cut back on expenses, including my cell phone. Rather than signing up for another two years when my contract comes up for renewal I’m thinking about getting a prepaid plan. Are the great prices I see advertised for real? Is this a good way to save money? What kind of plan should I look for?

Sincerely, Bud G.


Dear Bud,
Prepaid is increasing in popularity and is becoming much more widely available. Like any phone service, you need to think realistically about your needs—and read the find print. Here are some things to look out for:


Overages. When you go over your minutes, does the phone shut off or does the price go up?” If the phone goes off, it should obviously not be your only phone. If the price goes up, how high does it go? Does the company offer any sort of overage insurance?

Coverage. Are the areas you frequently call included in the coverage area? What about areas you occasionally call? If no, what kind of roaming charges will you face? The provider should have coverage maps available so you can see whether your areas are included.

Phone. Try it out before you buy, and make sure it appears to work properly and has all the features you want. Who pays for it if it is lost or stolen? Is there an insurance plan and if so, is it worth the cost? How much is replacement cost? Can you return it if you are dissatisfied?

Number Portability. You should be able to transfer your old cell phone number to your new phone.

Data Charges. If you’re going to be accessing the internet with your phone, make sure you compare the costs with other plans, some prepaid phones with low rates for texting and calling may have high data charges.

Adding Minutes. How easy is it, and is there a penalty? Does your prepaid provider automatically add more minutes when your run out? If you are using a credit card is it automatically charged every month for the new minutes? If you are manually going to add new minutes what is the procedure to do so?

Return policy. Does the provider allow a 30 day period for returning the phone and canceling the plan if it doesn’t work for you?

Customer Service. Make sure you find out how to contact customer service if you have a problem.

After you buy:

Don’t get Crammed. If you automatically renew by credit card each month, double check your statement to make sure additional, unauthorized charges haven’t been “crammed” onto your bill. See Pre-Paid Wireless Plans: Beware 8 Gotchas for more information on no-contract cell phone plans and Protect yourself from ‘Slamming’ and ‘Cramming’ and TURN wins new safeguards against phone fraud for more on Cramming.

Don’t be afraid to complain. If you’re not getting what you paid for, don’t understand your bill or have other questions, don’t hesitate to ask, and keep asking until you get answers. Document any problems, and write down dates, times and details of any conversations with customer service.