How to buy a prepaid phone

Last reviewed: January 2009
Motorola W175g cell phone
Motorola W175g (TracFone), $50
Decent listening quality for a GSM phone. 7¼-hour talk time. Lightweight. But display is low-res.
Nokia 2610 cell phone
Nokia 2610 (AT&T), $20
Decent listening quality for a GSM phone. 6½ hours of talk time. Lightweight. But display is low-res.
LG Flare cell phone
LG Flare (Virgin Mobile), $30
Offers Bluetooth support. Lightweight. But rather short 3-hour talk time. Works on only one CDMA band.
Samsung SCH-u340 cell phone
Samsung SCH-u340 (Verizon), $60
4 hours of talk time. Has voice command and a VGA camera.

A whopping 94 percent of surveyed readers have a traditional cell-phone plan, so you might be unfamiliar with prepaid phones and plans. Here's how to get started with prepaid:

Choose a carrier

There were few differences in satisfaction among T-Mobile, TracFone, Verizon, and Virgin prepaid phone users, but AT&T lagged behind those four carriers. Verizon customers complained less than those of other carriers about prepaid plans that don't offer free in-network calls or free nights and weekends.

Select your phone

Prepaid phone models are available online from the carriers and at walk-in stores, including dedicated wireless retailers, discounters, and drugstores. Prices range from free (with airtime purchase) for the likes of the Motorola W376g camera phone from TracFone, to $180, which buys a Motorola Krzr mobile Web-capable handset with MP3 player from Boost. Verizon's $100 Blitz prepaid handset has a 1.2-megapixel camera, Bluetooth, Web browsing, GPS navigation, and a slide-out QWERTY keyboard. (That $100 price is about what the Blitz costs with a two-year Verizon contract.)

Some carriers' phones work under both contract and prepaid plans. You might, then, be able to use a phone you received under contract with the same carrier's prepaid service. But check first with the carrier, and be aware that you might have to see out any remaining contract term on the phone or pay the early-termination fee to end the contract.

Because price is often a big reason to go prepaid, we tested four budget-priced ($20 to $60) models from major prepaid carriers. All performed competently in our tests, with very good voice quality when talking and good quality when listening (comparable with many phones in our Ratings) and sufficient talk time. Most of these phones are relatively lightweight. All are easy to use and tell or show you how many minutes are left in your account. But their displays are smallish and they're light on features such as mono Bluetooth support (now almost universal on phones offered under contract), a music player, 3G support, and GPS navigation.

Pick the best plan

You always pay in advance, rather than after you get a monthly bill. But carriers have devised a variety of charging schemes. You can pay a monthly fee for a set number of included minutes; pay no monthly fee and 5 to 20 cents per minute; pay a daily access charge, every day or only on days you use the phone, plus a per-minute fee; or pay a monthly fee ($30) for unlimited local calling or more ($50 to $80) for unlimited national calls and no roaming fees, with free long distance.

Free nights, weekends, and in-network calls are available on some plans. You can prepay online using your credit card, as needed or automatically with a scheduled credit-card payment. You then draw down your balance based on use and monitor your time left via the handset display. Minutes do expire, but usually not if you add more money to the account, typically $15 to $50, in which case the leftovers roll forward.

To figure which prepaid phone plan would be least expensive for you, check your recent cellular bills and tote up how many day, night, weekend, and in-network minutes you use per month. Then compare, to one another and to your existing plan, what you'd pay under prepaid plans at the carriers our readers rated well: TracFone, T-Mobile, Virgin, and Verizon.

Do you want the same cell-phone number?

The same regulations that allow you to transfer your cell-phone number from one traditional carrier to another, upon request as long as you stay in the same geographic area, also apply to prepaid. Your new carrier will take care of the transfer process.

Posted: December 2008 — Consumer Reports Magazine issue: January 2009