Prepaid cellphones are an alternative to more traditional
wireless plans or contracts. They work well for individuals
who do not use their phone often or do not need or want to
pay for extra features, such as video streaming or a mobile
hotspot. Prepaid plans don’t require a contract or a credit
check and don’t slap customers with exit or overage fees.
If you need a cellphone for basic communications like
texting and calling, or if your credit is a barrier to signing a
contract, a basic phone paired with a prepaid calling plan
might work for you.
The Facts on Prepaid Cellphones
October 2020FACT SHEET
CitizensUtilityBoard.org
1-800-669-5556
What are My Prepaid Plan Options?
Consumers typically have three prepaid options.
Monthly: Monthly prepaid customers pay a set monthly fee
for a specic amount of data/minutes/texts that expire after
about 30 days. If you hit your prepaid usage limit before
the end of the 30-day cycle, your service shuts o. In that
case, you can pay for more usage, or wait until your pay
period renews.
Such plans typically have automated monthly billing, but
consumers can usually stop payments at any time without
penalties.
Pay-as-you-go: With these plans, the consumer “rells”
the phone as necessary. Unlike prepaid monthly plans, the
talk, text and data you purchase on a pay-as-you-go oer
lasts much longer than 30 days—sometimes up to a year—
and can be used anytime until they expire.
Pay-as-you-go does not have automated billing: You rell
your phone at your discretion.
Pay-by-the-day: Users with this type of plan pay a basic
fee to keep the phone line active. Then, on days when they
intend to use the phone, they would pay an additional
charge—typically around $1 to $5 a day—to use it on an
unlimited basis during that day.
Remember: Not all plans are available through every car-
rier. Research available plans before commiting to a carrier.
With plans as low as a few bucks a month, a prepaid cell-
phone could be right for consumers who:
• Only want a phone for emergencies;
• Don’t want the latest high-tech devices; or
• Don’t want the hassle of credit checks.
Is a Prepaid Plan Right for Me?
Prepaid plans can be competitive with typical oers from
the major wireless carriers and are appealing to a wide au-
dience. Remember, many prepaid plans use the same cellu-
lar network as major carriers and oer comparable service.
(Tip: If you have a smartphone and want your prepaid
minutes to last longer, you can access WiFi calling without
eating up data or minutes available on your plan.)
For some consumers who need multiple phones or a family
plan, a major carrier’s oer may be cheaper than a prepaid
plan, because it allows customers to add phones (or lines)
for as low as $10 per phone. Another factor to consider:
While they tend to be cheaper than devices from the major
carriers, prepaid phones often need to be purchased in
full. Some people prefer a free phone upfront with a two-
year contract, or to pay monthly installment fees for their
device.
Most major carriers (AT&T, T-Mobile, Verizon and Sprint)
oer prepaid plans, but there are many smaller carriers, like
Boost, Cricket and GreatCall, that have prepaid options too.
Prepaid plans are sold at wireless provider stores, con-
venience stores, and major retailers such as Target and
Walmart. You can also order them online or over the phone.
What Companies Offer Prepaid Plans?
What are the Pitfalls of a Prepaid Plan?
There are hundreds of prepaid plans and companies to
choose from. Whichever you choose, make sure to read
the ne print. Some plans oer a low per-minute rate but
charge daily “access fees.” Others charge higher per-min-
ute rates with no access fee. Beware that with some deals,
purchased minutes expire after a certain period of time if
a customer doesn’t buy more. Also, check the company’s
coverage map to make sure that your area has service.
Most plans allow you to keep your phone and your phone
number, but check before signing up for a plan
Can I Keep My Phone and Number?
No, most prepaid carriers charge an additional fee for
international calling, such as Prepaid T-Mobile’s fee of $15
per month for international calls. (Note: You can make
international calls for free through an internet connection
and apps such as WhatsApp, Skype, Facebook Messenger,
GoogleHangouts, and FaceTime.)
Do These Plans Include International Calling?