Cell Plans -- Prepay vs. Contract


Published: Monday, January 29, 2007 at 6:01 a.m.
Last Modified: Monday, January 29, 2007 at 12:00 a.m.

Sun staff writer

Facts

What type of cell phone plan is right for you?

Russ Nekorchuk was fed up with his cell phone company.

After retiring in 2004, Nekorchuk realized he was paying $30 or $40 a month for a phone he rarely used for more than a few dozen minutes a month and he was putting up with poor reception in key areas.

And so when his contract came up, the 60-year-old University of Florida linguistics graduate student got out. And, after 1 years with a prepaid cell phone plan, he's not looking back.

"If you want that emergency security phone, the pay-as-you-go is perfect," Nekorchuk said.

While it seems many Americans have cell phones surgically attached, companies such as TracFone and Virgin Mobile are growing in popularity among those whose usage is light.

"I'm a baby boomer, I don't use the phones heavily," Nekorchuk said. "The cost is a fraction of even what the land line cost."

Prepaid phones are one way consumers can cut down on their bills, if they know their cell phone habits, said Greg Daugherty, editor-at-large for Consumer Reports.

But finding the right plan can be a balancing act that requires watching phone habits and looking for the plan that provides the best fit.

"The ideal is not to buy more than you need or less than you need," Daughtery said. "If you buy more than you need, they can go to waste, and if you buy less than you need, you can end up paying a lot per minute when you go over."

While the prepaid plans can cost more per minute, they may provide a good solution for customers who plan on using their minutes over a longer period of time.

For example, a year of service with 400 minutes of calling time costs about $130, or about 28 cents a minute, with TracFone. Customers will pay about $40 for a monthly plan with 450 anytime minutes on many carriers, working out to about 9 cents a minute.

But Nekorchuk said with the amount he uses his phone, 450 minutes may last more than a year. By avoiding the contract plan, he's saving $350 a year.

"I don't see myself ever going back to a contract plan," Nekorchuk said.

Daughtery agreed that some consumers might benefit from the pay-as-you-go plans.

"They can be very expensive on a per-minute basis," he said. "But if you're not using it all the time, only using it for emergencies, they keep you from those awful contractual arrangements."

Jeff Adelson can be reached at 374-5095 or adelsoj@ gvillesun.com.

What type of plan is right for you

Pre-paid:

Good if cell phone is only used for emergencies or quick calls.

Pros: No contract or monthly payments, so you only pay for the minutes you use.

Cons: Higher per-minute cost.

Barebones plan:

For customers who regularly use about 300 minutes a month.

Pros: Less expensive than other contract plans.

Cons: Low number of included minutes may lead to expensive overages. Require contract.

Typical plans:

For customers who use their cell phone frequently.

Pros: Included minutes come at a lower cost-per-minute than other plans.

Cons: Other plans may provide adequate service for less money. Require contract.

Saving time

When the minutes included in a plan are running short, every minute on the phone can count. David Pogue, technology columnist with The New York Times, suggests one way to shave off precious seconds in a blog post in October: skip through the prompts when leaving a voicemail message. Each carrier has a different code that allows users to jump right to the "beep" rather than listening to a message drag out. If the person you're calling uses Verizon or Cingular, press "*" ; Sprint, press "1" ; and T-Mobile press "#" .

And to find out just how close you are to the limit, carriers may let their customers check the number of minutes used on the company's Web site. Otherwise, Pogue recommends calling into numbers set up by each carrier. For Verizon, dial "#646" ; for T-Mobile, dial "#646" ; for Cingular, dial "*646" ; and for Sprint, dial "*4". If that seems hard to remember, keep in mind that 646 spells out "MIN," as in "minutes," on your keypad.

Prepaid

Good if cell phone is only used for emergencies or quick calls.

· Pros: No contract or monthly payments, so you only pay for the minutes you use.

· Cons: Higher per-minute cost.

Bare bones plan

For customers who regularly use about 300 minutes a month.

· Pros: Less expensive than other contract plans.

· Cons: Low number of included minutes may lead to expensive overages. Requires contract.

Typical plans

For customers who use their cell phone frequently.

· Pros: Included minutes come at a lower cost-per-minute than other plans.

· Cons: Other plans may provide adequate service for less money. Requires contract.

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