by Zachary Katkin

Created on: June 29, 2008   Last Updated: February 27, 2012

A Quick & Dirty Guide To Prepaid Cell Phone Plans

Prepaid cell phone plans used to be the black sheep of the mobile phone plan family. Up until very recently they were only a consideration for those with poor credit, unable to qualify for a full fledged cell phone plan. But, they are quickly becoming a viable alternative to conventional plans.

Before selecting any plan you must first weigh the overall pros and cons of any prepaid plan:

Pros:

•  With a prepaid plan, it's... prepaid, you know exactly how much time you have, and how much time you have left, with a preset spend. Because of this, you won't have to "manage" your minutes, scared you might go over and incur high overage charges.

• You will not be bound to any contract or service. Most cell phone contracts start at 1 year or 2 years and can be a costly expense to break from.

Cons:

• You will have to pay, and pay retail, for your phone. Often, the reason you are bound to a contract in a conventional mobile phone plan is to subsidize the cost of the cell phone.

• Mobile phone minutes are more expensive. Minute-4-minute they can be many multiples more expensive.

• You may have a "daily access fee," a fee incurred to allow access to a mobile phone network.

Prepaid cell phones have limited phones. If you are looking for the latest and greatest phone, a prepaid cell phone, may not be the best choice for you.

With these general pros and cons weighed, you can more easily evaluate and select different prepaid cell phone plans. Because of the nature of prepaid plans they are much simpler to evaluate then conventional plans, which mix minutes, text, data, etc. in the with plans. If you are looking only for voice calls the process is incredibly simple.

Although many people will advocate selecting a network (AT&T, Verizon, etc.) first, it is recommended that you do some research in order to determine which network has the right features, phones, and rates for you.

The key things to look out for in evaluating all networks include rates (typically cost-per-minute), connection charges, availability of particular phone models, and extra specials.

Rates refer to the cost-per-minute incurred by you through using your phone. If you use your phone for one minute and it costs $0.25, this is your rate.

Connection charges is a dangerous, but sometimes appropriate fee, and something that should definitely be evaluated. AT&T's new plan, for example, has a connection charge of $1.00/day, but this allows you access to a special $0.10/minute rate. Although the $1.00/day is very high, and almost seems like a conventional plan, it may be cost-effective if you are using your phone a lot.

Availability of particular phone models may or may not be important to you, but if you do settle on particular service and phone it is recommended that you do some research and learn about the phone model you will be using. Make sure it is reliable and has good call quality.

Finally, keep an eye out for extra specials. Often times networks allow unlimited in-network calls even between conventional cell phones and prepaid mobile phones, allowing you to get even more bang for your buck if your family uses the same network.

Weigh the pros and cons of a conventional mobile phone plan against a prepaid mobile phone plan. Should you decide to go with a prepaid cell phone, keep the four items:

• Rates (typically cost-per-minute)
• Connection charges
• Availability of particular phone models
• Extra specials

And you will have an exceptional prepaid mobile phone experience.

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