Could prepaid cellular save you money?

If you are the type of person who requires the latest smart phone or iPod, or who has their cell phone permanently attached to their ear, then this tip may not be for you.  But if you just need a phone for basic use, and usually find that you have a ton of unused minutes each month, then you just might be better off with a prepaid cellular plan, although even some “power users” of may benefit.

All of the major cellular companies offer such plans, but they are often not even advertised.

One major advantage for many folks is that these prepaid plans do not require a credit check.  This is because if you don’t prepay, or don’t purchase more minutes before your minutes run out, the phone just stops working (except for emergency 911 calls).  However, even if you have good credit, these plans may work to your advantage.

As always, when using such plans, understand the fine print, as the terms and charges vary greatly, and do occasionally change.  Some plans charge you a set amount each month for an unlimited number of calls.  Other plans charge a set amount per minute, but your minutes expire in as little as 30 days.  Yet other plans may charge low per minute fees, but also charge a set fee on any day that you use the phone, even for as little as a single minute.

One advantage of most of these plans, is that the normal fees and taxes with a post paid subscription plan are not added to the bill (in actuality, these fees and taxes are built into the price per minute you pay up front).  Still, having no hidden fees often feels like a much more straight forward deal between you and the phone company.

Personally, I prefer a straight forward plan.  My wife and I converted a normal monthly post paid plan into a prepaid, and even kept our phone number.  We first purchased 1000 minutes for $100.  Since we immediately accumulated more than $100 in total purchases with the company, the minutes do not expire for a full year.  There is no per day usage or other monthly charges added.  Taxes and other access fees are built into the $100 charge.  Domestic roaming and long distance are included.  Both incoming and outgoing calls count against the 1000 minutes, including all night and weekend calls; in other words, all minutes are created equal.  If you have leftover minutes at the end of the year, and you purchase additional minutes before the year is actually up, those remaining minutes then roll over into the new year without expiring.  Lesser numbers of minutes cost less, but are actually more per minute.  Also, when purchasing fewer minutes, the minutes normally expire in 30 to 90 days (however, if you’ve accumulated $100 in total purchases of minutes, the expiration is extended to 1 year for all purchases).

For light or even medium usage, this type of plan might be perfect.  If you only use 100 minutes a month, the $100 of minutes lasts for 10 months, and your net cost is only $10 per month, includnig taxes!  If you only use 80 minutes per month, then at the end of the year your net cost was only $8.33 per month and you still have 40 minutes left to carry over to the next year if you buy another refill

To save even a few more dollars, do some searches on the web for prepaid cellular refills at a discount.  But, be careful and make sure the deals are legit.  One place I found for this that has worked well for me is www.callingmart.com.  And if you follow my advise about searching for online coupons here, you may be able to save even more (we often buy $100 calling cards good for 1000 minutes for as little as $88 to $91 each)

If you are interested in these sorts of plans, a good rundown (but possibly dated) can be found on the USA Today website by Kim Komando at http://www.usatoday.com/tech/columnist/kimkomando/2009-01-29-prepaid-cellular_N.htm

So, if your phone usage happens to match these kind of guidelines, look into prepaid cellular and save some green!