Comparison Shopping for Prepaid Cell Phones

Historical Perspective

The Cell Phone is one of the most innovative inventions of the twentieth century. Callers can find an individual anywhere in the country through calls, text messaging, and the mobile Internet. When the cell phone first came on the scene it was targeted to doctors and other professionals. Those in this league paid around $1 per minute, so the number was not on business cards or anywhere else that someone could call without a real good reason.

Cell Phones companies then revamped their target audience to the mother with children who might need to make an emergency call for help, such as a car breaking down on a snowy night. The rate was $19.95 per month for 30 minutes.
Finally, someone realized that people wanted to be cut from their home phone cord, and made the cell phone available to the average person. The problem came with the deposits that some companies required. Some went as high $1200. Further, per minute charges was still high since block plans had not come out in full force yet. Therefore people who could not afford to pay these astronomical deposits and monthly bills were forced to be left behind technologically.

Those with bad or no credit had no available options until cell phone companies came up with the prepaid plan. Consumers paid a higher rate than the average consumer, but at least they could have a phone. Cell phone companies began to target college students with the plan, since most did not have the credit to establish normal monthly service. Since this innovation, companies also started using this option for their sales reps out on the field, and as a benefit to their employees.
The prepaid cell phone is great for those who want to keep their phone bill at a specific amount per month. With the advent of the free nights and weekends, users are hard-pressed to find a difference in the prepaid vs. normal cell phone service.
In 1987, the monthly average of a U.S. cell phone bill was $96.85; in 1998, it was $39.43. A friend may say to you “Call me on my cell.”

Definitions

Prepaid: Consumer pays monthly charge in advance by credit card, EFT, or through refill cards.
Refill Cards: Cards of various amounts available for purchase from cell phone stores to gas stations.

Deposit: A Credit company who considers a person a risk will require them to put a certain amount down in order to get service. The amount of the deposit is according to the credit score obtained by the company. The average is $150.

Credit Limit: The amount a customer can charge up to. The customer cannot go over this amount without making a payment or losing service.

Comparing Prepaid Cellular Providers

T-Mobile to Go: They seem to utilize the refill card. The cards range from $10 to $100 which gives the user anywhere from 30 minutes to 1000 minutes. A special benefit is that when the customer has purchased over $100 in refills they receive another 15% added. The exception is the $100 card, which does not add any minutes. The higher the card amount the longer the expiration date. The average is 90 days.

Internet access is free on this plan. It includes basic news sites, games, and other things. Text messaging is $.10 to send and free to receive.

Refill cards can be picked up at over 10,000 locations or purchased online.

Virgin Mobile: The target audience for this product is the college student, as evidenced by the services they provide. Users have three plan options.

1. $0.25 cpm/first ten minutes of the day then $.10 cpm thereafter.
2. $0.35 per day/$.10 cpm thereafter.
3. Monthly Plans start at $29.99 for 150 anytime minutes and 150 nights/weekends.

Internet access is $.20 per day and does not count against minutes. Chargeable downloads will be deducted from the account balance.

Refills can be done online, by telephone, on the cell phone, or at stores.

Liberty Wireless: This is a no frills cell phone with nothing, but minutes. There is no text messaging or Internet access. The phones are all refurbished and generally two or three years old. Sprint is the network that they use. Their strongest sale is the $0.10 flat fee.

TracFone: This is one of the oldest prepaid cell phone plans. It is also one of the most expensive. Users purchase phones starting at $34.99 then purchase cards from $19.99 to $79.99. These cards only keep the number for 60 days. Customers are charged higher rates for yearlong access. In addition, customers pay $14.95 per month for double minute plans. Customers are always aware of how much time they have left on their phone. There are no activation fees. They can be purchased at over 60,000 retail locations and online. In the event you do not add a TracFone Prepaid Wireless Airtime card every 60 or 365 days, service will be suspended until you add a TracFone Prepaid Wireless Airtime card, at which time they will reactivate your service and assign you another wireless phone number.

Sprint: This prepaid is as close to the normal one as can be found. Users pay a deposit up to $150, which is their credit line. Users then get the same plans available to other customers. The differences run in that if the consumer goes over their limit without making a payment or are late making a payment; their service is turned off until the bill is clear. Users have access to the Internet and text messaging, if the phone is equipped for them. The drawback to sprint is that the plan can become expensive very easily. Unlimited Internet, text messaging and pictures run around $20 per month. Unlimited nights/weekends cost $5 per month. The first 500 minutes runs around $35. If the phone is purchased online, they usually can be obtained free with a new contract. They do charge a termination fee charged if the service is interrupted for any length of time.

US Cellular: This is one of the best plans on the marker. The costumer buys a kit for around $125, which includes a phone, charger, and minutes. The benefit of US Cellular is the free call me minutes. This means a customer can receive calls for free. All the minutes outgoing are included on their plan. The option is available to add nights/weekends for $5 per month. There is not an option for Internet access or text messaging. Another plan they offer is the $0.10 flat rate plan. The cost comes out about the same except the expiration is 60 days instead of 30.

Cingular/ATT: This plan is similar to the US Cellular plan except they offer a $0.10 rate plan with a $1 per day access charge. They also offer a $.25 per minute plan with no access charge. The monthly plan must be linked to a credit card or checking account.

Boost Mobile: This plan is for the person who wants all the benefits of a phone including a walkie talkie. To have the walkie talkie feature runs $1.50 per day. Calls run $0.20 cpm during the day and $0.10 cpm nights/weekend. Test messaging is $0.10 to send, Internet is $0.20 per day and does not affect minutes. Voice mail runs the same rate as phone calls, with the exception being calls made from a landline. The target audience for this is urban youth.

Where to purchase Prepaid Cell Phones/Supplies

Some of the best offers for cellular phones and supplies happens online at the actual cell phone company. Some offer free phones or discounted phones that are not available in stores. Refill cards are usually the least expensive at outlets such as Wal-mart. The good thing is that supplies are available 24/7 since they can be purchased at a local gas station. Phones can be picked up at any location and activated within an hour. Consumers should have an idea of what plan they are looking for and what they want to pay monthly.

Benefits of Prepaid Cellular

The main benefit of a prepaid cell phone is no bill at the end of the month. For people with no credit or bad credit, the prepaid cell phone allows a user to have a cell phone without a credit check.

The lack of contract is also a pleasant benefit for many users. If a person finds a better phone service they do not have to pay the average $200 termination fee that most cell phone companies require.

Though the targeted audience for most prepaid cell phone service is the minority and the college student, mainstream America is catching on to the idea. It helps with budgeting concerns, can be cheaper in some respects if the company has children they want to have a phone. Little Johnnie can’t run up the bill with $5.95 downloads or staying on the phone all day.
Drawbacks to Prepaid Cell Phones

Until recently, most of the cell phone companies seemed to be punishing people who could not afford to have their service by charging them much higher rates for their lack of a contract. The main drawback is the lack of incentives companies give to the prepaid customer. They are not offered free phones, for example. Another thing is that some plans can become expensive if the costumer has to pay daily access fees, or are allowed to go over their minutes.

Do the Math

When doing a comparison it would be wise to have a calculator to figure out which company is the best for the intended user. Some clients may only want a cell phone for emergencies, which might make TracFone the most reasonable, but for Johnny at college who has friends around the world that would be an expensive venture.

US Cellular $40
Cingular $49.99
TracFone $99.98 (2 cards)
Boost $80
Virgin Mobile $50.50
T-Mobile $50

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