Thursday, March 8, 2007

Are prepaid phones a good option for you?

Are Prepaid phones a good option for you?

I’ve been in the wireless industry for about 4 years and in my own personal experience, I believe prepaid wireless phones are a rip-off. I’ll break down some pros and cons of prepaid and you can judge for yourself.

Pros- The pros to having prepaid is you don’t need good credit. Many of us don’t have perfect credit and we all can’t afford a $250 deposit. This is one of the reasons prepaid was invented.
Another pro to prepaid is no long term contracts. Many wireless users don’t know how long they expect to have their cell phone. Some just need it for a week or two, others only a few months. Now a day, the norm has become 2 year contracts. Break the contract and you pay a $175 cancellation fee.
Control your spending and not running up a high bill. Never get a $500 cell phone bill.
Emergency use only.

Con’s- Since there is no credit check and no deposits for prepaid, the plans and rates are terrible. You will get ripped off in the minute rates. Normally around 10 cents per minute, while if you got a regular contract, you could get around 600 minutes for only $40 plus unlimited nights and weekends. Do the math and you will see how horrible prepaid rates are.
Since there are no long term contracts, you have to buy the phones outright. They used to cost around $100, but now you can find prepaid phones starting at around $30. More affordable however the phones are as basic as a Ford Pinto.
You may control how much you spend, however you can’t control the minutes. Once you run out of minutes you’re FORCED to buy a refill card. You spend more money in the long run.

Is prepaid for everybody? If you truly have no credit and no money to afford a monthly contract, then yes. But why do you need a cell phone if you can’t afford it, why waste your money on talking instead of saving? If you do have the credit and can afford the monthly, I would suggest getting a regular plan with one of the carriers. You save money in the long run, TONS of money. While working at a wireless store, I’ve seen people spend an average of $50 per week on their prepaid and all they wanted to do was save money. They could have spent $50 a month on a contract, but they were fooled in thinking you save money using prepaid. Decide on what your true intentions of a wireless phone is before you buy.

pre-paid cell phones

1 comment:

Thinking in Binary said...

I would also point out, as a Pro, that prepaid phones can be much cheaper in the long run. TracFone, with a one-year airtime card, comes out to something like $8.33/month if you don't make that many calls. If you don't use your wireless phone as your primary phone, it's a much better deal than the usual $30-40/month minimum that monthly plans cost.