How Prepaid Cell Phone Plans Work
Buy a phone from a prepaid wireless provider.
Buy online or at a store. You cannot use an old phone from another provider.
Buy a card worth anywhere from 10 minutes to several hundred minutes.
Cards usually expire 30 to 90 days after activation.
Talk.
Your account will be deducted for each outgoing and each incoming minute. Billing increments are a minute: a 2 second call counts as one minute.
Typically, you must buy a new card before the current one expires.
If you do not renew your card, you will not have phone service (other than 911) and when you renew, your phone number will probably change. Buying a new card, however, will usually allow your old minutes to remain active.
To cancel your service, don't buy any more minutes.
You have no contract with a prepaid plan, so you can just allow your minutes to expire, and never buy another card again. Continue to use your cell phone for 911 calls, see below for more info.
Prepaid vs. Billed
| Prepaid Plan |
Billed Plan |
| No contract |
Contract Cancel early and you will incur steep termination fees [1] |
| Per-minute cost is usually higher | Per-minute cost (of your bulk minutes) is usually lower. Use more than your bulk, and the per-minute cost goes up. |
| No credit check | Credit check |
| When your minutes run out, your phone won't work--you'll need to buy another card. When your minutes run out, you could lose your phone number and your phone stops working until you buy another card. To avoid losing your number, you must buy another card before you use all your minutes or they expire. |
When your minutes run out, the charges per minute skyrocket- just wait for the high bill.You NEED to keep track of your minutes. |
Shopping Tips
Watch out for plans that charge by the "unit" instead of by the minute!
The definition of a unit can change at any time.
Make sure your phone comes with a battery charger.
Ask the provider about any initial setup charges.
Who is providing the actual service?
Many prepaid providers use others' network to transmit your calls. Make sure the network is a good one.
Buy the cards that are right for you!
Cards do have expiration dates, so don't buy more than you can use. But don't buy too little, either: the more you spend, the less the acutal per minute rate is. For example, a $100 card will usually get you a better rate than a $50 card.
911-only Phones
Get a used, deactivated cellphone for 911 emergencies.
Talk to friends, family and coworkers.
By law, you cannot be disconnected from 911 service.
Even if you don't have a prepaid card or service, the service must carry 911 calls.
Remember that the phone must still be charged and be in range of a cell tower to work.
In other words, cellphones are not fool-proof. Landlines are still the preferred option for 911.