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How to Buy a Prepaid Cell Phone Plan

what is a prepaid cell phone

What the Best Prepaid Cell Phone Plan Has

  • Pay-as-you-go prepaid plans are just what they sound like. You buy a phone, and then buy service (in set amounts of minutes or dollars) as you need it, refilling the card at grocery, convenience, drug and discount stores or using your credit or bank card to add refills over the phone or Internet.
  • Monthly prepaid phone plans can be more convenient. With these, you pay a set amount every month, depending on your minutes and data allotment (if any), just like a traditional postpaid cell phone plan. However, there is no credit check or contract, and you can cancel without penalty at any time.
  • Selection of phones. Your choice of phone depends on two elements: how you use your phone and what the prepaid cell phone carrier offers -- and most now offer smartphones as well as basic phones. Many will also let you activate your own compatible phone on their network.
  • Wide coverage. Some prepaid carriers are owned by one of the large nationwide carriers, such as Sprint. However, that doesn't guarantee identical coverage -- for example, while Sprint customers can roam on Verizon's network, on Sprint-owned Virgin Mobile roaming is not allowed. Other prepaid carriers are Mobile Virtual Network Operators (MVNOs) that buy minutes in bulk from major carriers and then resell them. Because of that, coverage areas and quality can vary widely, and offer some surprises. As always, your best bet is to check a carrier's coverage maps -- and talk with others who are subscribers.

Know Before You Go

Estimate your minute usage. If you're a frequent cell phone user, you might save money by choosing a prepaid plan that allows unlimited calls, texts and data for a set monthly fee. Less frequent cell phone users might be better served by plans that let you buy time by the minute, and that offer long expiration dates (some are as long as one year).

Ask friends and neighbors. Those who live and work in your neighborhood can tell you how frequently they experience outages, busy networks or dropped calls. Once you gauge satisfaction, check carriers' websites for promotions, shop their retail stores and call them to see where you can get the best deal.

Consult sites such as and lets you search for service and cell towers by zip code. You can also read subscriber comments for specific areas, down to particular cross streets in your neighborhood. has a complaint database and a listing of dead spots in metropolitan areas.

If you travel frequently, be sure to choose a wireless carrier that lets prepaid customers roam. Most prepaid wireless carriers let you make calls when you're outside their area, but a few charge roaming fees, which may become an issue in rural areas. Some carriers don't allow roaming at all.

Check the terms, since no two plans are alike. Some require monthly or daily usage fees, and minutes expire after a certain period of time, from 30 to 365 days. Many plans let you roll over minutes by adding funds before existing minutes expire (topping off).

Check for free calls. Some carriers offer unlimited calls between you and another subscriber using the same carrier. Verizon's 10-cent pay-as-you-go plan, for example, has a $1 access charge on days you make calls, but all calls to other Verizon subscribers are free.

Read the fine print on unlimited prepaid plans. For example, data might be unlimited, but go over a certain amount of usage and your 4G/LTE speeds will be reduced to 3G or even 2G.

Extra services can add up. Most prepaid plans don't charge anything extra for nationwide long distance, roaming, voice mail or caller ID. However, many do charge extra for data access, international long distance, text, and picture and video messages (although unlimited prepaid plans often include this) as well as games, music or ringtones.

Elsewhere in this report:

Best Prepaid Cell Phone Plans . What's the best prepaid cell phone plan? Editors analyze expert and user reviews and select the best unlimited and pay-as-you-go plans.

Best Unlimited Prepaid Phone Plan . Who offers the best unlimited prepaid plans? We compare talk, text and data offerings from the top prepaid cell phone carriers.

Best Pay-as-You-Go Cell Phone Plans . Pay-as-you-go plans are pricey, but can still be a good option for some. We look at top plans for occasional cell phone users and international callers.

Our Sources . Links to the expert and user reviews we used to select the top prepaid cell phone plans, along with our assessment of each reviewer's expertise, credibility and helpfulness.

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