Switching To Pay-As-You-Go or Prepaid Cellphones

Let’s talk about phones. Should you be lucky, you can take a turn in a small metallic box and handle all your telecommunication needs. For the rest of us, we are tethered to little screens dangling from power cords that seem to grow out of our pockets more and more every year. What’s worse, you may have found that the roommate you share your pants with is dipping out of your wallet. Thief!

Thankfully, you won’t have to call the local sheriff to evict your phone. Just take off your pants and don’t look back; your significant other will thank you. Should you get into work one day with your boss crying about how they cannot contact you via your pants anymore, I suggest you contact a good lawyer. If they are just referring to your little telecommunication screen, it’s time to talk about pay-as-you-go & prepaid contract phones.

Step 1 – Decide Your Needs

Pay-as-you-go means exactly what I typed it out as- you pay for what you use. This is how we’ve been praying HBO will go for years, only cheaper. However, there are two fundamentally different ways to buy your prepaid telecommunication needs: figuratively, you can buy each episode separately on Amazon or iTunes or you can buy a Season Pass. You can get prepaid cell phone plans that charge per call, per day, or per month. In order to figure what you need, you need to open up your smart phone or pull out your current cell phone bill and look at your history.

How many minutes do you use each month?
How many SMS (text messages) do you use (send & receive)?
How many MMS (picture messages) do you use (send & receive)?
How many MBs/GBs of data do you use for mobile web? Can you live without this?
Do you need mobile email? How about instant messaging?

Step 2 – Calculate Your Costs

There are two things you really need to think about when calculating costs: what kind of phone you will need and what your usage levels are above. If you look at Boost Mobile, which charges 20 cents a minute for calls, you would spend 60 bucks a month for 300 minutes. Their Unlimited Talk, Text & Web Android plan is $55 a month and their regular Unlimited Talk and Text plan is $45 a month. Verizon and AT&T are similarly priced. Clearly, true pay-as-you-go is for small volume telecommunication needs. In fact, if you look at competitor TracFone, they sell a 1-year, 400-minute card for $99 which works out to 25 cents a minute. Their 60 minute card is 33 cents a minute, but only adds 90 days to your phone’s plan. If you’re going to call Batgirl as a source for your exposé on Gotham or conduct some other private confidential matters, this is your route; otherwise, you are probably going to want a month-to-month prepaid plan.

Remember, even when you buy minutes ahead of time, they usually expire within 30, 90, or 365 days. You can’t save your minutes forever. The biggest advantage of this is privacy. The biggest advantage of a prepaid month-to-month plan is significant cost savings over the long term. A brand new iPhone 4S is $200 today, plus $100 dollars per month, minimum. It only provides 2GB of data usage and goes up by $10 for 2GB more. A new iPhone 4S from Virgin Mobile is $650 today, and $55 a month for unlimited talk, text and data. In a mere 10 months, you make up the difference in cost and start saving money. At the end of two years, you’ll have saved $630 dollars. You can save even more with cheaper plans.

Step 3 – Find Your Phone & Carrier

You need a phone that will act as a prepaid phone. If you want to do true pay-as-you-go, you need to get a phone specifically modeled for that. Pick out your carrier (AT&T, TracFone, T-Mobile, Boost Mobile, Cricket Mobile, Verizon Mobile, etc”¦) and figure out what phone will suit your needs. If you want privacy, take cash out of the ATM and go to a local convenience or mobile store and make your purchase. If they ask for a name, tell them Baberaham Lincoln, because your mother was a patriot and your father was a fox!

If you want a prepaid month-to-month plan, you have a couple of options for a smartphone. You can buy your smartphone up front, but it’s going to cost you at least $200 for a good one, generally. If you want an iPhone, you are going to need several hundred dollars. However, you can also buy a used, unlocked phone. AT&T, for instance, will now unlock any iPhone at an AT&T store that has been purchased on contract after the contract expires. That means you can purchase someone’s iPhone on Craigslist, have it unlocked, and take it over to Virgin Mobile or T-Mobile store for a prepaid plan. (You will need to go into a mobile store to get a SIM card, most likely).

Step 4 – Activate Your Phone & Buy Minutes or a Plan

I activated my phone online. It wasn’t hard at all. Most carriers seem to offer this method. All you do is create an account with them, give them an email address, your phone’s ID number, and sign up. If you aren’t transferring a number, they will assign you one based on your location. You can buy minutes for most carriers at the store you bought the phone with cash for privacy or you can buy more minutes or a prepaid plan online. Many carriers even offer auto-pay and/or a $5 discount for auto-pay: this just means you link your credit card to your account, but there is no $350 cancellation fee when you decide to change your plan or stop carrying a phone.

Step 5 – Share Your Experience With Us

If you have already cut the contract and made the switch to prepaid or bought a pay-as-you-go phone for privacy, share your experience with us in the comments. What carriers have you had success with? What are the best places to get cheap used phones for prepaid plans? Who has the best service? How much money have you saved?

Here is my short story: when it was all said and done, I got my pay-as-you-go phone for $10 bucks and I added 20 minutes. Hopefully it will only cost me the initial $30 to carry out all my secret plans.