Prepaid Plan Buying Guide

How much do you pay for your cell phone bill? According to CTIA Wireless Association and J.D. Power & Associates, the average monthly cell phone bill was $47 while the average individual’s cell phone bill was $71 per month in 2010. This translates to about $200 per month for a family of 4 members. By switching your contracted phone plan to a prepaid plan, you can save significant amount of money without sacrificing quality of service you’ll receive.

Know how many minutes, text (SMS+MMS) and data you use

Before you can switch to a prepaid plan, you’ll have to understand how prepaid phone plan works and know precisely how much talk, text and data (Internet) you’ll need on a monthly basis. The best way to find your usage pattern is by looking at your past few months of phone statements (see below).

Wireless Phone Statement
Sample Statement from Sprint

Looking at the statement above, the (630) XXX-XXXX number is using approximately 1,200 minutes (60 minutes anytime + 1150 nights & weekends), 500 texts, and 500MB data per month. The (847) XXX-XXXX number uses 400 minutes, 1,000 texts and over 3GB of data. If you look at your previous statements, you’ll find your average minutes, texts and data you use per month. Based on your usage pattern, you’ll pick a plan (from a prepaid provider) that is best suited to your need. Each individual has unique usage characteristics, so knowing your usage will help find the best plan.

Pick a Carrier and the plan

There are 5 MNOs and over 50 MVNOs to choose from where you can obtain wireless cellular service. Depending on the phone you have chosen, you’ll have to pick a service provider offering same network technology (GSM or CDMA). If you have the freedom with your phone, you may choose a MNO/MVNO first. This will give you a wide selection of cellular plans.

Prepaid Phone Providers

You’ll pick the best plan that meets your usage pattern, depending on the type of phone you choose and the technology you want to use. If you have a GSM phone, you are limited to the AT&T and T-Mobile networks whereas if you have a CDMA phone, you’ll be choosing from Verizon, Sprint, US Cellular and their MVNOs. Each network provider has varying network coverage and reliability in each region. Depending on where you live, you may opt to choose one network provider over another.

With prosperity of no-contract plans, many MNOs such as Verizon, AT&T, T-Mobile and Sprint are offering no contract (postpaid) plans at a discounted price. One of the easiest way to save money is switching a contracted service to a non-contracted service if your current provider offers it. If you have a contracted service with subsidized phones, you may be able to switch to a no-contract plan without having to pay ETF (Early Termination Fee) — saving money on monthly service fees. With no contract or prepaid plans, you’ll have to purchase a phone outright at full retail price. Your phones from contracted plan will also work in non-contracted plan.

If you want to save money on phone bills, your best bet is to go with the prepaid plan. Picking a best prepaid plan for your usage pattern may not be easy as you think. There are so many MVNOs and their plans to choose from. There are fixed prepaid plans and pay-as-you-go plans where you only pay for services you use. Each plan has it’s advantages and drawbacks, so you’ll have to do your homework before signing up with a plan you want. Our Prepaid Wireless Plans is designed to help you find the best plan for your need. Please browse our Service Providers list with overview of the company, wireless plans, available phones and user reviews to pick a plan that is just right for you.

Pick a Phone

If you do not already own a phone, it’s best to pick a carrier and service plan before purchasing a cell phone. Since you are not limiting yourself to CDMA or GSM network, you have wide selection of service plans to choose from. If you are a frequent traveler, traveling outside of the USA, you may opt to choose an unlocked GSM phone. This will allow you to use your phone elsewhere by just replacing the SIM card. Since GSM is the network standard widely adopted outside of USA, you’ll have easier way to find a provider worldwide with a GSM phone.

Unlike contract (or postpaid) plans, prepaid phone plans do not offer subsidized phones when you activate a wireless phone service. If you’re looking to purchase the latest model of smartphone, you’ll have to pay near retail price of the smartphone (~$600) instead of the subsidized pricing of approximately $200. Even though you are paying a lump sum amount for your phone, your prepaid net spending will be less than the contracted service as your monthly fixed payment will be significantly lower than the contracted service. If you do not require a latest phone model, your savings will be even greater.

One caution about picking a phone for a prepaid service:  You will have to either purchase the phone directly from the MVNO (either through their website or through retailer), or find an “unlocked” or approved phone that can be activated on the provider’s network. Since prepaid wireless service provides a deeply discounted offering, many MVNOs are limited to offer only a narrow selection of phone models. Otherwise, you’ll have to hack or flash the phone models that are unofficially supported in the provider’s network.

Save Minutes, Texts and Data with Messaging Apps

Messaging Apps

If you have a smartphone with limited minutes, texts and data plan, you can save your limits by utilizing phone apps and Wi-Fi. There are a number of free messaging apps (WhatsApp, Tango, and LINE to name a few) with integrated VOIP feature for your iPhone, Android and Windows phones. You can use Apps to send SMS, MMS or make voice calls to your friends and colleagues. You may also utilize Google Voice (w/ Talkatone or SIP) to make free VOIP calls. If you utilize Wi-fi for your data whenever possible, you can further save your data usage significantly — lowering your monthly phone bills.

Compare Prices

When comparing prices, extra fees and taxes added by the MVNOs should be factored in. It should be noted that some MVNOs include taxes and fees in their advertised price (Prepaid Model) while others charge extra for various fees including federal and state taxes, activation and ESN/MDN change fees, infrastructure fees and among others (Postpaid Model).