Prepaid Wireless Information

Prepaid wireless is an alternative to a traditional monthly cell phone plan (covered in our report on cell-phone plans ). Prepaid cell phones (also called pay-as-you-go) are a good option for people who don't use cell phones that often or those who need a cell phone only for emergency situations. Regular cell-phone service almost always involves a long-term contract (usually one or two years), but prepaid wireless plans are generally month-to-month. Pay-as-you-go cell phones are a good way to control cellular costs for teenagers, senior citizens or people new to cell phones. Finally, a prepaid cell phone might be the only option for those with damaged credit ratings, who might not otherwise qualify for a monthly cell-phone plan.

When choosing a prepaid cell-phone plan, reviews say the network is the most important factor, followed by pricing and flexibility. Large surveys conducted by J.D. Power and Associates, Consumer Reports and PC Magazine form the backbone of our report. All three reviews poll thousands of households on overall satisfaction with their wireless carriers and are the best way to gauge overall network coverage, call quality and customer service. J.D. Power surveyed over 4,000 prepaid wireless users. PC Magazine polled over 8,000 subscribers on both regular and prepaid wireless service, while Consumer Reports surveyed about 43,000 subscribers (though their research wasn’t specifically geared to prepaid cellular).

In addition to these three large surveys, we found some other helpful articles on choosing prepaid wireless. The Wall Street Journal and The New York Times both offer interesting buyer's guides for pay-as-you-go cell phones. CNet.com also has a buyer's guide, plus some reviews of the phones themselves. A new website, PrepaidReviews.com, has some good information on costs and features, though service and coverage are not rated.

We found several reviews for TracFone prepaid wireless. Unlike the major carriers (such as Verizon Wireless, Sprint Nextel, Cingular and T-Mobile), TracFone doesn't own its own network of cell towers. Rather, TracFone (as well as companies like Virgin Mobile and Boost Mobile) is an MVNO (Mobile Virtual Network Operator). MVNOs buy large batches of minutes from the traditional wireless carriers, piggybacking on their national networks. In PC Magazine's survey, TracFone falls behind Virgin Mobile's prepaid wireless when it comes to overall satisfaction. However, TracFone has an advantage in that you can buy minutes in convenience and discount stores (including Wal-Mart).

Virgin Mobile leases network access from Sprint Nextel. We found excellent reviews for Virgin Mobile prepaid wireless, mainly because it offers a good selection of inexpensive phones, a wide range of low-cost calling plans, and no roaming charges. Since Virgin Mobile uses Sprint Nextel's network, some of the comments we found for Sprint Nextel also apply here. In owner surveys, Sprint Nextel's call quality fell behind T-Mobile and Verizon in nearly every part of the country. However, Virgin Mobile has less expensive phones than T-Mobile, and its calling plans are less expensive than Verizon Wireless or T-Mobile. Those factors may ultimately make Virgin Mobile a better choice for those more interested in low costs than call quality. In the latest surveys at J.D. Power and PC Magazine, Virgin Mobile is the highest rated prepaid wireless carrier.

If you are trying to decide between a regular monthly cell-phone service and a pay-as-you-go plan, you need to do some careful math, and reviews say prepaid wireless may end up costing more than a monthly plan if you don't watch your usage. Experts say that choosing the most cost-effective pay-as-you-go plans means estimating your minute usage, analyzing the degree to which you will travel out of the coverage area (since roaming may cost extra), estimating the amount of text messaging and other extras you will use, and understanding how the plan charges for its various features. Finally, phones with prepaid plans sometimes cost more, since companies tend to subsidize phones for monthly service but not for prepaid cell-phone plans.

But for a lot of people, the benefits of prepaid wireless can outweigh the downsides. There's no monthly bill, so it's easier to control costs. Any taxes and fees are included in the price of prepaid wireless plans, so there are no surprises. No one will check your credit, and if you don't want to continue with your prepaid wireless plan, you just stop buying minutes

Pros and cons of prepaid cell phones

In general, you don't get the same wide range of choices as with regular monthly cell-phone plans, but this is changing quickly. Wireless carriers now see a huge untapped market when it comes to prepaid wireless, and there are more plan choices, a wider phone selection and more extra features than there were just a few years ago.

The benefits of prepaid wireless are pretty obvious: No monthly bill, easier-to-control costs, no credit checks and no long-term commitment. However, there's a laundry list of considerations that could ultimately make a regular, contracted cell-phone plan the better option. If you're not sure which is best for you, see our other report on cell-phone plans .

On a per-minute basis, prepaid plans generally cost more than a contract plan. For example, one of T-Mobile 's prepaid plans costs $25 for 130 minutes . That works out to about 19¢ per minute. If you signed a long-term contract with T-Mobile, a $30 monthly plan would buy you 300 anytime minutes, plus unlimited weekend calling. So it's pretty easy to see that tying yourself to a contract can be a better deal, especially if you make more than 130 minutes of calls per month.

In addition to per-minute charges, some prepaid wireless plans charge a daily access fee whether or not you make a call. For example, even though the INpulse plan offered by Verizon Wireless has a 10¢ per-minute rate, Verizon deducts 99¢ per day whether or not you make any calls at all. That means you're spending around $30 per month before you've even made any calls. Cingular's 10¢ per minute plan is a little more generous, charging a $1 access fee only on days you make calls -- that's in addition to per-minute charges. Cingular's 25¢ prepaid plan costs more per minute, but there's no daily fee. Some small carriers are a better deal. We didn't find many reviews for Net10, but calls cost 10¢ per minute with no daily access fee ($30 minimum purchase).

Paying a daily access fee for a plan usually gives you a lower per-minute rate, which might be a good deal for heavy talkers, but reviews say people who want their phones for emergency or quick calls will probably be better off spending a bit more per minute or going with a plan that charges a fee only on days you actually use your phone. Extras such as text messaging, picture messaging or calling from outside of your calling area (roaming fees) generally cost more.

Some carriers have an 'autopay' plan, where you are charged each month, but without a long-term contract. This type of plan may have a cheaper per-minute rate with no daily access fees. For example, TracFone has a $15 autopay plan, whereby your phone is kept active for $15 per month. Then you pay for minutes on top of that. $20 buys you 120 minutes (that's 17¢ per minute).This might sound like a good deal, but you're actually paying at least $35 a month for only 120 minutes of usage.

With prepaid wireless plans, your pay-as-you-go minutes don't last forever. Some plans' minutes expire after a set number of days (usually 30, 60, or 90). So if you don't use your minutes, you lose them. Most carriers require that you spend a certain amount each month (or every 60 days) to keep your account active, even if you still have minutes or cash remaining in your account. Many carriers allow your unused minutes to rollover to the next month if you deposit more money before they expire. If you spend more all at once, your minutes can often have a longer expiration date. Both T-Mobile and TracFone have an annual rate plan; if you spend $100 (T-Mobile, includes 1000 minutes and TacFone includes 250 minutes), your minutes last a year. Net10 has an annual plan, but you have to spend $150 for 1500 annual minutes.

In addition, some prepaid wireless plans charge higher per-minute rates but include free night or weekend minutes, or they offer unlimited calls between you and another subscriber using the same carrier. Cingular's 10¢ pay-as-you-go plan, for example, has a $1 access charge on days you make calls, but all calls to other Cingular subscribers are free.

Other costs sometimes include roaming fees (which apply when you're outside your network's calling area), long-distance charges (particularly for international dialing), text and picture message fees, and charges for games, music or ring tones.

Best prepaid wireless

The best prepaid wireless plans balance call quality and price. In this respect, reviews say T-Mobile has an excellent combination of call quality, customer satisfaction and cost. In large customer surveys, T-Mobile gets high scores for voice quality and overall satisfaction. When it comes to prepaid wireless, its T-Mobile To Go plans are pretty straightforward -- $10 buys you 30 minutes which expire in 30 days. A $25 deposit gets you 130 minutes, and you have 90 days to use them, while $50 gets you 400 minutes (with 90-day expiration). If you spend $100 all at once, you get 1000 minutes, and you have a full year to use them. If you add more minutes to your T-Mobile To Go account before your minutes expire, unused minutes rollover to the new expiration date. You can make calls anywhere in the U.S. on T-Mobile's network, even if you are outside your local area. Sending text and picture messages costs 10¢ and 25¢ respectively. Phones start at $30.

Verizon Wireless gets high scores for voice quality in reviews, but its prepaid plans are not as impressive. Verizon INpulse has a 10¢ per-minute rate and unlimited nighttime calling, but you are charged a 99¢ access fee per day, even if you don't make any calls. If you deposit between $15 and $30, your minutes expire in 30 days. With a $30 to $75 deposit, minutes expire in 60 days. There is a $35 activation fee to get started. Calls made from within Verizon's national coverage area are included, but if you're outside Verizon's coverage, 69¢ per minute roaming charges apply. Calls to other Verizon subscribers are free. Verizon's access fee means you'll always be spending at least $30 per month whether you make any calls or not.

Virgin Mobile gets the highest ratings for overall customer satisfaction in surveys at J.D. Power and PC Magazine -- higher than T-Mobile and Verizon Wireless. Virgin Mobile also has youth appeal, with proprietary ring tones and features from MTV. Virgin Mobile has a wide variety of low-cost prepaid plans and excellent call quality according to subscribers. What's interesting is that subscribers give Virgin Mobile higher ratings for call quality than for Sprint/Nextel, the underlying carrier used by Virgin Mobile. Critics say this might be because youth oriented subscribers aren't as concerned about call quality, or that better satisfaction for customer service and pricing may help minimize complaints about call quality.

Virgin Mobile's pay-by-minute plan charges 18¢ per minute to talk anytime. There's also a 10¢ per minute plan with a monthly $7 charge. These plans are best for those who don't make many calls. All minutes expire in 90-days. Adding at least $20 every 90 days will keep your account and minutes active, and unused minutes rollover.

For those who want more talk time, Virgin Mobile's pay-by-month plans are cheaper than T-Mobile's. For example, $15 gets you 100 anytime minutes from Virgin, and $25 is good for 200 minutes. Free nights and weekends kick in at the $45 level, which also gets you 400 anytime minutes. However, these minutes expire in 30 days, so if you have unused minutes, you lose them. T-Mobile's minutes expire in 90 days, but cost more. You can top-up your phone automatically by credit card, or you can add minutes manually with a top-up card or online minutes purchase. Phones start at about $20.

Cingular Wireless offers some prepaid wireless plans, but in large surveys, Cingular gets lower scores for call quality and overall customer satisfaction than T-Mobile and Verizon. Like other plans, your minutes carry over if you replenish your account before they expire.

Boost Mobile is a division of Sprint Nextel, and it is one of the only prepaid carriers to include a push-to-talk (PTT) feature similar to walkie-talkies. Boost Mobile's basic pay-as-you-go wireless costs 20¢ per minute on weekdays and 10¢ on nights and weekends. Push-to-talk costs an additional $1 per day. Minutes expire after 90 days. Boost Mobile also has some monthly plans with no contract. Your credit card is charged each month. The cheapest $30 plan includes unlimited push-to-talk and 300 anytime minutes. The $50 plan gets you 400 anytime minutes plus 10¢ nights and weekends. A $70 plan includes 600 anytime minutes plus unlimited nights and weekends. Unlike conventional cell-phone plans, there's no contract, and you can cancel anytime.

In J.D. Power's recent customer satisfaction survey, Boost Mobile was rated nearly as highly as T-Mobile, but Virgin Mobile ranks higher than both.

Newcomer Net10, a division of TracFone, has gotten some buzz lately. It's running a 10¢ per minute plan that applies to any type of call (including roaming) at any time. Minutes expire in 60 days, Net10 has not yet been rated in big consumer surveys, so call quality, service and overall satisfaction are unknown. We made a few test calls to Net10 customer service with poor results. The agents sounded like they were working in a room with 100 other people, and we couldn't hear them well enough to ask our questions. We had the same experience when we called TracFone customer service with another question.

Amp'd Mobile is another newer cell-phone provider. This company's prepaid cell phone plans cost a straight 10¢ per minute. Your credits can also be used for value-added stuff like ring tones, games and 99¢ music downloads. Text messaging costs 10¢. Push-to-talk is available for $1 per day, only on days you use it. Amp'd Mobile uses Verizon's network for delivery and coverage, so call quality and coverage should be the same. Minutes expire after 60 days, but the bad news is that your unused minutes don't rollover -- so you lose unused credit after two months. The phones are also expensive, starting at $180. There's usually a rebate running for $100, but that means the cheapest Amp'd Mobile phone still costs $80. We haven't yet seen this carrier in any of the big customer satisfaction surveys. Our customer service experience with Amp'd Mobile was better than with Net10. Amp'd Mobile has an online chat feature where our questions were answered quickly and accurately.

Amp'd Mobile looks interesting if you really want a high-end phone and the ability to download games, videos and music. However, the lack of rollover means you could end up wasting a lot of money.

Prepaid wireless service for emergencies

If you want to keep a cell phone on hand for emergencies, but don't plan on using it regularly, you might consider a pay-as-you-go plan with a long expiration, so you don't have to worry about your minutes disappearing. T-Mobile has a good deal: If you buy 1000 minutes for $100, they don't expire for a year. TracFone also has a plan like this, but $100 only gets you 250 minutes. Net10's annual plan costs $150 and gets you 1500 minutes.

Using a prepaid cell-phone while abroad

Cellular companies in the U.S. use a number of proprietary networks for their cell-phone service, and that means that a cell phone made to work with Verizon's CDMA network will not work on a GSM network, such as those supported by T-Mobile and Cingular. This could be important if you travel overseas and would like to take your cell phone with you, since most European, African and Asian cell phones work on GSM networks. Be aware that American GSM phones and foreign GSM phones work on different frequencies, so you will need a specific tri- or quad-band world phone with multiple frequencies.

In order to swap SIM cards, you will have to ask your cell-phone service carrier to unlock your phone, allowing your phone to send signals on a different frequency. Most carriers will unlock your phone, but only reluctantly, according to a story in USA Today. T-Mobile will do this for you if you have been a customer for at least 90 days. Or websites like www.unlock123.com will unlock Nokia phones for about $5. TheTravelInsider.com will do the same thing for most Nokia phones, along with many GSM world phones from Samsung, Siemens, Motorola and LG.

The advantage of switching SIM cards is that a local SIM card gives you a local phone number, making in-country calls inexpensive (avoiding very high roaming fees). In addition, most countries don't charge you for incoming calls. CNet warns that voicemail messages can cost more than at home.

Most U.S. prepaid wireless carriers will also let you provide your own phone, as long as it's unlocked and supports their network. So if you already have a GSM phone, you could buy minutes from T-Mobile or Cingular. Carriers may charge an activation fee if you don't buy one of their phones, however.

Most prepaid wireless carriers will let you make calls overseas, but international calls cost more. Virgin Mobile, Boost Mobile and all the major carriers support international calls, but rates are high.

Important Features: Prepaid wireless

Monthly cell-phone plans vs. Prepaid wireless

If you have good credit and don't have a preference, you'll have to choose between a monthly plan and a pay-as-you-go plan. If you make less than about 200 minutes of calls per month (that's about one 6-minute call per day), a prepaid plan will generally be the best choice. If you'll make more than 400 minutes of calls per month (about 13 minutes per day), a monthly plan is probably the better option. If you think you'll fall into the middle somewhere, you have a more difficult decision.

About.com has a helpful calculator that can narrow your decision. The ten-question quiz helps you calculate the best prepaid cell phone plan for you. It includes questions to determine how many minutes you use your cell phone in a week, how long a typical phone call lasts, etc. You should take this step to estimate usage: http://cellphones.about.com/library/bl_pt_q1.htm.

After you determine the type of phone, minute usage and type of service you will use (such as whether you will use text messages frequently, whether you’re likely to travel out of the calling area, etc.), experts advise going the next step and doing some fact-checking on your own before settling on a plan. Carriers offer deals, rebates on phones and special offers on their websites and in stores, so it is always a good idea to check with the individual carriers (listed in Best Research).