Prepaid Plans

Prepaid plans are great solutions for people who use their phone infrequently, don’t want to sign a contract, or struggling with credit. You buy your minutes in advance and use the phone until your minutes run out and then you can replenish your account with more money. Prepaid minutes will expire anywhere from 30-120 days typically and will usually offer features such as voicemail, call waiting, call privacy, and some are now offering data services. This is not an economical choice for people who use their phone everyday because you pay more per minute with the prepaid plans. You may also be paying more for the phone because wireless carriers subsidize the cost of new wireless phones when you sign a contract because they can recoup their money from the monthly charges.

Calculate your usage

The most important thing to choosing a wireless plan is figuring out how many minutes you will need. You don’t want to sign up for a 2000 minute plan when you’re only going to use 300 minutes a month and vice versa. You will end up paying too much if you don’t have enough minutes or end up having too many leftover minutes.

Some more factors come into play because many carriers offer perks such as unlimited nights & weekends or unlimited mobile-to-mobile minutes. Some carriers are also offering free incoming calls but still not a widely accepted practice. Remember that you have to pay for receiving calls unless you have free incoming calls and minutes are used for checking voicemail messages from your cellular phone. You can check your voicemail messages from your landline phone without using your wireless minutes.

Always give yourself a little cushion with extra minutes, in most cases it is better to have extra minutes than to go over by just 100 minutes. Some carriers will offer you the choice to change service plans without extending your contract, this is something you may want to ask about. Remember to check your minutes from your phone, carrier website, or calling customer service because if you get charged .40 cents/minute overage and go over by a 100 minutes, look forward to paying an extra $40 plus taxes for the month. It doesn’t use minutes to check minutes and you should check about once a week or as often as possible to budget your minutes for the month.

Additional charges found on your phone bill

Almost everyone I know gets shocked when they see their first phone bill. They signed up for a $39.99/month plan but they get an $100.00 phone bill when they haven’t gone over their minutes. There are other costs to keep in mind when you sign up for a new service plan.

Activation fee: This is a one time fee charged among most major carriers as a setup fee for your account. Costs vary among different carriers but you can sometimes find deals where they will waive the activation fee if a promotion exists. Activation fees can also be associated with changing your phone, activating a new number, or adding an additional phone to your account.

Number portability surcharge: This has to do with Wireless Local Number Portability (WLNP), something you can read about more later on in this guide. Carriers pass on the costs of federal regulations onto the consumer usually less than a dollar a month. Remember the termination fee and last bill before switching carriers especially if your contract isn’t up with your current service provider.

Text messaging, multimedia messaging, and Web browsing: Lots of people are getting into text messaging, downloading ring tones, looking up movie times on their cell phones. This may all seem nice to have but comes at a small price, if you plan on being a heavy user, look into signing up for a data plan.

411 service: Many people think this feature is free but costs are usually $1.25/minute per call plus airtime when you call directory assistance.

Things to consider before making the final decision

• Find out about how many grace days you have to try out their service and the early termination fee if you have to end up breaking your contract.
• Not all plans come with free long distance or no roaming charges so find out if there are any.
• Know your calling boundaries, if you’re not on a national plan you should know where you can make calls or call to with your calling plan so you don’t get extra charges for long distance or roaming.
• Most carriers require a two-year contract these days but some will offer a one-year contract.
• Some restrictions may apply when changing your service plan in the middle of the contract. You may have to extend your contract depending on the carrier terms.
• Unfortunately phones do break, get lost, or stolen. Find out what kind of warranty is offered as well as insurance. Warranty and insurance is not the same and you usually pay monthly fees for insurance.