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Frequent Contributor
Dadaluma83
Posts: 364
Registered: ‎08-23-2011

So.. what is the catch with prepaid cell phone plans?

Saw a post in general credit about cell phones and hard inquiries and it got me thinking about my own cell phone plan.

 

I don't care about any sort of brand loyalty or anything like that. Don't care about unlimited this and that. I probably maybe use on average 20 minutes a month and probably 100 text messages a month, when I had a girlfriend the number of text messages jumped dramatically probably to 500 or even more, don't care so much about unlimited data as I will be using a wifi hotspot whenever possible so 2 GB is plenty.

 

In fact only one thing matters to me, a phone that works worldwide easily so that leaves AT&T and T-mobile as they both use GSM which is a worldwide standard and verizon and sprint use CDM or something like that which is only really used in north america. As far as I know yes you can use a verizon or sprint phone anywhere in the world but you have to notify them, jump through some hoops, and do this and that for it to work while AT&T and T-mobile you can walk off the plane anywhere in the world and your phone is good to go.

 

So I was researching some cell phone plans. I originally wrote off prepaid because it conjured up images in my mind of a prepaid debit card which for me would be a waste of time and money and if anyone suggested I get a prepaid debit card I would LOL so hard, but actually prepaid cell phone plans seem to make a lot of sense for someone like me.

 

Looked at contracts for Verizon and AT&T iphones. I would have to pay upfront 200 dollars for the iphone plus an activation fee, then even choosing the lowest minutes, text, and data plans that conform to my use of a phone I would be paying 85 a month on verizon and 90 a month on at&t, plus I hear both have outrageous roaming charges worldwide. Would basically cost you a monthly car payment to post a picture of you from the streets of Munich or something.

 

I can afford it, yes, but as a generally frugal person I don't want to pay that much.

 

 

So I started looking at prepaid and T-mobile. They have a plan, unlimited data (Well technically unlimited they remove you from 4G when you go over 5GB which isnt an issue for me), unlimited text, and 100 minutes a month which definitely works with my monthly use of the phone and it is only 30 dollars a month. 30 dollars as opposed to 3 times as much with a contract phone.

 

No iphone of course, but they do have android phones and looking on the t-mobile website I can buy a top of the line android phone for around 200 or 300 dollars, not much worse than a contract iphone and for my purposes android and iOS are the same as the travel apps I need, and some game apps when I am bored are available on both.

 

From what I understand with a prepaid phone you just put a sim card in your phone that represents your current plan and then keep paying it monthly until you want to change to a different plan. Also for any international travel I don't have to roam I could just buy a prepaid sim for the area I am visiting and pop it in, then when I get home pop in my regular sim card.

 

Seems like prepaid is dirt cheap and super flexible as you can just change plans whenever you want. Only downside is you pay full price for new phones but you can get a good android phone for about the price of a contract iphone anyway so that is not much of an issue.

 

So it seems almost too good to be true. Super cheap and super flexible, no comittments. So what is the catch?

 

On the surface for someone who likes to travel and needs a reliable phone that will work worldwide, and doesn't use a phone all that much on a regular day it seems prepaid is hands down the best option.

FICO Scores: TU: 768 (Jan 2012), EQ: 755 (Jan 2012 Lender pull)
Regular Contributor
BlueNightStar
Posts: 181
Registered: ‎07-09-2011

Re: So.. what is the catch with prepaid cell phone plans?

There is no catch, at least for mine. I had the same fears as you before I went prepaid, assumed it was substandard phones and service. I've had Virgin Mobile for 2 years with zero issues and a huge cost savings. I've never had to contact customer service because it's prepaid. I realized the only time I contacted my carriers prior to the switch were for billing issues :smileyhappy:

Established Contributor
Chris123nTx
Posts: 500
Registered: ‎05-11-2007

Re: So.. what is the catch with prepaid cell phone plans?

There is a company, products are still in beta testing (i am on the list) that is looking at unlimited everything, prepaid, for 19.95 per month. The phones, like in most prepaid plans will be limited to those that they are able to ensure will perform to their networks needs. The biggest thing about them and how they can offer the price is in their push of everything to wifi automatically anytime a wifi signal is available. You have to have a wifi network at home, but from all i have read this all seems legit. There are web articles all over with a quick google search. Their website is republicwireless.com worth a look anyway. I hope to be able to snag a phone sometime late summer early fall, till then i use a 50 a month unlimited plan from straight talk. Go to walmart and look, they have a wide variety of them. Read the fine print on charges. I saw one that would charge you a dollar a day in addition to the monthly rate, any day that you made a call. That was one from one rom one of the big wireless companies, though i dont remember which one.
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FrugalRican
Posts: 2,876
Registered: ‎02-02-2012

Re: So.. what is the catch with prepaid cell phone plans?

I have Virgin Mobile as well.

Zero issues, and it's saved me at least $45 dollars a month because I tailored a plan specific for me that works excellently. Went from paying $75 a month to about $37 a month. My minutes are limited, although I don't use them. I have unlimited text messaging and it's a Sprint-back network. I don't travel too much so I'm fine with that.

 

The only drawback is that I depend on Wi-Fi to be able to access the internet, but thankfully, that's not a huge feature for me to lose out on.

 

There really has been no catch for me. The CS has been excellent so far and knowing that I'm saving about $480 a year is most excellent.

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Frequent Contributor
Dadaluma83
Posts: 364
Registered: ‎08-23-2011

Re: So.. what is the catch with prepaid cell phone plans?

Talked with an aquaintenance of mine yesterday who does a bit of app development and asked him about cell phones and traveling and he told me above all else, get an unlocked phone. Said AT&T contract phones never unlock their phone so you are stuck on their network and their roaming. Said he has a T-mobile prepaid phone.

 

Said when he goes back home to India for a few weeks he just puts in an Indian sim card in his phone, then get back to the states and put in his regular sim card. Apparently unlocked phones let you jump networks like that.

 

So definitely looks like hands down a T-mobile prepaid is the way to go if you plan on doing any international travel.

 

Was talking with someone in the office yesterday who is big on cell phones but told me he can't really help with prepaid as he has never had a prepaid phone. Has a contract verizon phone. Also said prepaid phones have the stigma of bad credit but it doesn't bother me. Prepaid seems to be much cheaper if you don't use a phone very often and the flexibility is great for travel.

FICO Scores: TU: 768 (Jan 2012), EQ: 755 (Jan 2012 Lender pull)
Valued Contributor
thrasher865
Posts: 1,157
Registered: ‎05-21-2008

Re: So.. what is the catch with prepaid cell phone plans?

[ Edited ]

Dadaluma83 wrote:

 

No iphone of course, but they do have android phones and looking on the t-mobile website I can buy a top of the line android phone for around 200 or 300 dollars, not much worse than a contract iphone and for my purposes android and iOS are the same as the travel apps I need, and some game apps when I am bored are available on both.

 



Are you sure?  My GF does the prepaid with AT&T, and wanted one of those for X-mas.  I got her the best Android phone you could get on pre-paid.  It's got a touch screen and all, and it does a good job of pretending to be a "top of the line" android phone, but quite simply, it isn't.  So just be wary that those pre-paid phones may look alright, but they may have poor memory, etc.

 

Were they name brand Android phones you see commercials for?  If not, they weren't top of the line phones.

 

Then again, her phone was like $160, I think.  So, maybe the $300 phone is nice, but I doubt it's "top of the line."


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Valued Contributor
thrasher865
Posts: 1,157
Registered: ‎05-21-2008

Re: So.. what is the catch with prepaid cell phone plans?

Also, she thought her plan was going to be "dirt cheap," but it wound up being just a bit less than a contract plan.  I think hers is like $39, then you have to pay an extra $20 or $30 a month for the data plan, which is a terrible data plan.

 

Look around, as AT&T doesn't seem to be as good a deal as you're describing.


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pizzadude
Posts: 9,674
Registered: ‎01-28-2010

Re: So.. what is the catch with prepaid cell phone plans?

 

I hooked my mom up with an Iphone 3GS, on AT&T prepaid ~ she uses it with only prepaid minutes and text messages, and doesn't have a data plan.    

 

$2 a day, only on days that she makes/receives a call or sends a text message.   She uses WiFi at home for iChat, email, apps, etc... works great if you don't travel around alot, and pretty much dirt cheap.

 

I think that AT&T doesn't officially support this, as they want to force you to buy a data plan, but it works.

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Valued Contributor
Repo-ed
Posts: 2,960
Registered: ‎02-09-2012

Re: So.. what is the catch with prepaid cell phone plans?

Just saved $30/mo by changing my unlimited plan w/ vzw to a tiered data plan.  I only use 5GB/mo and chose the 6GB/mo plan.  $360/yr savings is something I can be happy about!

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Established Contributor
pipeguy
Posts: 823
Registered: ‎10-31-2011

Re: So.. what is the catch with prepaid cell phone plans?

[ Edited ]

Dadaluma83 wrote:

 

So I started looking at prepaid and T-mobile. They have a plan, unlimited data (Well technically unlimited they remove you from 4G when you go over 5GB which isnt an issue for me), unlimited text, and 100 minutes a month which definitely works with my monthly use of the phone and it is only 30 dollars a month. 30 dollars as opposed to 3 times as much with a contract phone.

 

No iphone of course, but they do have android phones and looking on the t-mobile website I can buy a top of the line android phone for around 200 or 300 dollars, not much worse than a contract iphone and for my purposes android and iOS are the same as the travel apps I need, and some game apps when I am bored are available on both.

 


 

This is the plan I use, you actually pay $30.50 a month to refill and it can be done automatically through a credit card (the 50 cents is listed as tax but if you refill for $30 or $50 or $90 its still plus 50 cents so its more like a service charge per refill buy - not every month unless you refill every month).

 

The plan is available exclusively through Walmart purchased plans and the $200 online Samsung Exhibit II Android phone is $175 at most Walmart stores. T-mobile online offers a $50 unlimited plan, but not the $30 one directly at least when I last looked. Unlimited 3G/4G data, 100 min talk $30 or a cheaper phone non-smart phone, 1500 min talk or text and 100 MB (something like that) data. My wife talks a lot and uses no data, I use some data and don't talk much unless she calls me all the time, but even after your 100 min its 10 cents a min so 200 min would be $40 and 300 min would be the same $50 as T-Mobile's standard unlimited talk and data. I think the most I've had is 176 min in a month (wife is around 800).

 

My Verizon bill was averaging $145 a month (wife and myself) now I pay $61-$65. No contracts, and even if I quit the monthly plan I can go on $1 a day unlimited talk. Is T-Mobile as good as Verizon as far as over all coverage, no, but its acceptable and not bad. The phone is not 2012, 6 months, 23 days new gotta have the latest today, but its an acceptable very useable smartphone with GPS wifi, bluetooth, etc and it you root it you can kill all the bloatware. Keep in mind that Verizon just increased the cost of data big time and by best guess my "plan" would be close to $200 a month today through Verizon (2 phones). I was a 25+ year Verizon customer from way back when they were Bell Atlantic and GTE, good riddance !

 

I have not tested the phone overseas, but when I traveled to Europe 5-6 times a year (5-6 years ago) I had another "local phone" for EU with a sim card so I'm pretty sure you can just switch it out.

 

That being said, get a Google Voice number and use a free Android app for Voip and you can make "free" calls voip calls anywhere you find a wifi connection in Europe using your Google voice number. BTW, you can have your google voice number "forewarded" to your regular number and bypass any monthly limit for talk. There are a bunch of viop free apps, some work better than others (some lag and echo, so play with different ones).


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