How does "pay-as-you-go" work for cell phones?

Question

Make sure your answer is detailed. I want to know exactly how it works. I've never owned a cell phone before, so I have no idea. Do minutes ever expire? If you have no minutes, can your phone still recieve incoming calls? If someone else phones you, does that conversation still use up minutes? What about text messaging? What about long-distance phone calls? Are long-distance text messages any different than local text-messages? Are there any special Sunday rates?

Please describe everything in detail -- I'm completely clueless.

My phone will not be for every day chatting, it will be for three minute conversations about where we are going to meet, and emergencies.

Answer 1

With a regular (postpaid) cell phone plan, you are billed on a monthly basis. Various surcharges and taxes can easily add another $10 each month to your bill. There is almost always a contract, which basically says that you are bound to that provider for 1 or 2 years with a hefty ($150+?) termination fee if you want to break the contract before it is up. With a contract plan, the provider can offer an incredibly low-priced phone to you as it is subsidized by the high monthly charge that is guaranteed by the contract. Since you are billed after the fact, there will also be a credit check to ensure that you are a reliable payer.

Some providers will roll over unused minutes (where the norm used to be use 'em or lose 'em). Many offer features such as unlimited calling on nights and weekends or to designated numbers. These postpaid plans will easily cost you $40-100+/month after surcharges depending on the amount of your usage. Also, if you exceed your allotted minutes for the month, the overage charges are incredibly high.

The basic premise of a prepaid (pay-as-you-go) plan is that you deposit money before you use airtime. When you deplete your balance, you simply add more money. You can purchase refills online (using credit card or direct bank transfer) or buy refill cards from a regular retail store and apply them either online or using the customer service phone number for your provider.

It is definitely worth noting that in addition to having no contract, you won't get hit with any surprise surcharges or taxes (as you would with postpaid) as they are already built into the per-minute charges. Because there is no contract guaranteeing that you will spend a lot on airtime each month, you will also find that the cost of a prepaid phone kit from a retailer will run higher than what a provider can offer you when you sign a contract. Prices on these kits (includes phone and starter card) can run as low as $20 depending on how fancy a phone you want.

Since you pay before you use, there is no need for a credit check. In the past, prepaid rates were incredibly high and typically used only by people with bad credit. These days, it is a very reasonably priced alternative to a postpaid cell phone plan and is the most sensible choice for users that don't talk on their cell phones a lot (300 minutes per month or less?).

Prepaid accounts always have an expiration date, but some providers' plans allow for longer expiration periods than others. The best are probably T-Mobile and Cingular. A $100 refill will not expire for a year, and both providers will allow you to roll over your balance when you refill assuming that you do so before the expiration date. Verizon expiration periods run shorter.

If your account balance falls below a minimum level, you will not be able to make or receive calls until you bring your balance back above the minimum.

Incoming calls incur the same charges as outgoing calls.

Text messages are usually billed at a different rate. T-Mobile for example charges $0.05 for incoming and $0.10 for outgoing text messages.

If you go with a nationwide provider like T-Mobile or Cingular, there will be no additional charges for domestic long distance calls. International long distance rates, on the other hand, are quite high. There is no difference between a local and long distance text message as far as billing is concerned.

Cingular used to have a prepaid plan with different on/off-peak rates (0.35/min peak, 0.10/min off-peak which included the weekend), but it was discontinued.

Per-minute rates usually start at $0.10 and go up depending on the provider. Cingular offers a $0.10/min plan that includes free mobile-to-mobile (calling another Cingular mobile user) minutes, but you are charged $1 on any day that you make or receive a call. Their simple plan is $0.25/min with no daily charge.

T-Mobile rates run as low as $0.10 if you buy the $100 refill (1000 minutes) and also offers Gold Rewards status once you have purchased $100 in refills (doesn't have to be all at once either). Once you get Gold Rewards, subsequent refills will extend your expiration to one year from the refill date regardless of the dollar amount of the refill. For example, if I refill for $100 in Dec 2006, the account will stay active through at least Dec 2007. If I refill my minutes in Nov 2007, the account will stay active through Nov 2008, and the balance in my account is retained.

Verizon inPulse has some nice features (and the best coverage all around according to Consumer Reports) but charges $0.99 every day regardless of whether or not you use the phone, so right away, you are going to be paying roughly $30/month in addition to the airtime charges. Boost, Virgin, and TracFone tend to have higher per-minute rates than T-Mobile.

Answer 2

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Answer 3

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Yup, no bill, just pay before you use them. The phone won't come with $70 of airtime. Much less... you have to pay for the phone itself. T-Mobile and Alltel are the best values in prepaid and have the best coverage as well nationwide since they let you roam for free on other carriers' networks where they don't have service.

Answer 4

Great point, but I'm not 100%

Answer 5

Leonard Dale and Nicki Lewis posted the same question. You should read the answers side by side.

Answer 6

I have Virgin Mobile. I bought the cell phone. (Cheap). You then buy a "Top-up" card in increments of $20. $30. or $50. It is 10 cents a minute, I believe...Long distance is more. If someone calls you it still eats your minutes. You can still call 911 if you have run out of time. Noone can call you however. Minutes expire when the money runs out. You can have them automatically deduct money from your credit or debit card online if you run low. I love this plan because I rarely talk to anyone on the cell. If I talked a lot this phone would eat my wallet. You can go to the Virgin web site for more information. Text messaging is expensive as well. These phones are for the broke or quiet. Hope this helps.

Answer 7

Do minutes ever expire? - yes, depending on how much you spend on a prepaid card. You'd have to check the carrier's site that you're going to be serviced with, they usually tell you when certian minutes expire.

If you have no minutes, can your phone still recieve incoming calls? - no, your phone will not be able to recieve incoming calls if you have no minutes left.

If someone else phones you, does that conversation still use up minutes? - Of course, you're using your minutes if you make or even recieve a call from someone.

What about text messaging? - text messaging costs money too. Usually it's 10 cents to send and recieve a message, which is deducted out of your minutes.

What about long-distance phone calls? - Usually with cell phones, calling long distance is calling to a different country which is around 50 cents a minute depending on what company you're with.

Are long-distance text messages any different than local text-messages? Long distance still applies here out of the country, which would be a little more then texting someone in the U.S.

Are there any special Sunday rates? - No, no such thing as Sunday rates.

Answer 8

that means that you buy your minutes like 10 cents per minute and then when you run out you have to buy more

Answer 9

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