Before You Buy Prepaid Cell Phone Services, Understand the Plans

According to a recent Wall Street Journal article, the number of people who buy prepaid cell phone services has grown rapidly in the past year. Given the current uncertain economic climate, more people are choosing to spend less and save more. It has been estimated that half of all cell phone minutes paid for in regular contract-based plans are never used and go to waste. Prepaid cell phone users do not need to waste money like that because they have the flexibility to pay only for the minutes that they plan to use. Heavy cell phone users can save by choosing to go with a low priced prepaid unlimited use monthly plan.

With the proliferation of prepaid plans, there are now numerous plan options available and some of them are hard to understand. As a result, even though people generally save money over contract-based cell phone services when they buy prepaid cell phone services, they may not be aware of the best plan that fits their needs. Before you make your purchase, why not take a little time to familiarize yourself with the options available so you can choose the best plan for yourself. Here are the 4 main types of plans:

1. Pay as you go

Pay as you go is the most basic way is to buy prepaid service. You buy airtime - a term that means a fixed number of phone minutes and a period of active service. For example, you could buy an airtime card for 20 minutes and  3 months of service, for $20. That means service will stay active for 3 months and you have 120 minutes during that period for use. The minutes are depleted every time you use your phone.

The bare minimum to keep service active is to have unexpired service time, even if all your minutes have been used up. For light occasional users of a cell phone, this is the ideal choice and would keep costs to as low as $7 a month. For this option, TracFone and Virgin Mobile are good choices.

2. Pay by the day

A second type of prepaid plan that has been gaining in popularity is the Pay by the day option where you pay only for the days that you use the phone. It could be a combination of a fixed amount, for example, $1 a day, and then 10 cents for each additional minute of talk time. Or it could be a small fee like $3 a day for unlimited use for the whole day. In this case, you prepay for the service, usually once every 3 months or once every year, and the usage amount will be deducted from your prepaid balance every time you use the phone. This is suitable for people who may not need to use the phone everyday but on the days they use it, they use it quite a bit. For this option, T-Mobile's Prepaid and AT&T's GoPhone are good choices.

3. Monthly plan

A third type of plan is the prepaid monthly plan. This is similar to regular contract-based cell phone services in that you pay once a month on a recurring basis. An example would be a plan for $15 a month with 150 minutes. Since there are no contracts, you can stop it anytime with no penalties. Another benefit is that your phone automatically gets topped up with new minutes every month, so you do not have to take time out of your schedule to purchase refill cards. For this option, Net10 and T-Mobile's FlexPay plan are good choices.

4. Super usage/Unlimited monthly plan

This is a high-end variation of the monthly plan and has attracted new converts who are accustomed to high volume usage on a contract-based plan. For $50 or less a month, you can find prepaid plans that offer unlimited talk, text and data access. For $30 a month, you can find plans offering 1,000 minutes of talk time and 1,000 text messages. This is perfect for you if you use your cell phone all the time. For this option, Boost Mobile, Virgin Mobile, MetroPCS and TracFone's StraightTalk.com service are good choices.

There is no one best prepaid cell phone plan that fits all needs. Hopefully, with the choices classified and explained above, you will be able to identify the type of plan that will most benefit you.

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