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Pre-Paid Cell Phone Service offers Cost Effective Solution

July 28th, 2005

Audiovox Flasher V7 takes pictures and is part of Virgin Mobile pre-paid cell phone service

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Pre-paid cell phone service can save money if you donít use your phone regularly or if you want to budget your money.  Instead of paying a monthly service fee, you pay as you go for minutes of cell phone usage for both incoming and outgoing calls.

The cell phone contract type calling plans start at $20 per month and goes up from there.  If you are limited on income, have a teenager, or do not use your cell phone except for emergency use the pre-paid cell phone service would likely save you money.  The customer prepays for phone service before using, they can either purchase time on a card at a store, pay on the internet with a credit-card or pay by calling.  

Virgin Mobile and TracFone are major providers of pre-paid cell-phone service and are setting a standard for the pre-paid cell phone industry.   Both have benefits for using their services over the traditional contract cell phone plans that most people are using today.

Virgin Mobile offer 3 different plans based on the amount of time that you will use in a month.  To keep the phone active you pre-pay $20 every 90 days or a keep the service for a year by adding a balance of $80.   The keep alive service deposits are able to be used for paying for calling time.  There is no contract to keep their service and you pay for the phone service as you use up the time, so long as you keep the cell phone active.  Failure to keep the service active will forfeit the unused minutes that you have paid for in advance.

Virgin Mobile sells a pre-paid cell phone for starting at $24.99 (they were out of stock at the time of writing but had phones in stock starting at $49.99) with free shipping on their website.  Virgin Mobiles entry level Minute 2 Minute plan charges 25 cents per minute for the first 10 minutes of calls for the day and 10 cents a minute for each minute after.  The pre-paid plans are becoming popular because of the amount of money that can be saved.  The cost for a typical cell phone plan starts at $20 a month for 100 minutes, compared with $7 dollars ($20 every 90 days) for the prepaid budget plan.   For a person who uses a cell phone for emergency calling this plan would save them around $13 a month and $156 a year compared to having a service plan.


The Virgin Mobile Day 2 Day plan will cost 35 cents each day, so that is $10.50 (based on 30 days) a month for signing up with this plan.  It is 10 cents a minute per call up to 500 minutes a month so it would be $10.50 plus up to $50 a month so it would be $60.50 if you called and talked for 500 minutes.  The calling plan for 600 minutes a month with T mobile is $39.99 with each additional minute over this being at 40 cents a minute.  Cingular Wireless offers roll over for unused minutes a plan of 450 anytime minutes and 5000 weekend minutes will cost $39.99 for a national calling plan.   Even though the cost of the calling plans for frequent callers it still could be less expensive for a person with the pre-paid calling plan because they do not reach the minutes in the plan.  Letís say a person uses on average 200 minutes a month on the cell phone.  With the pre-paid plan using Virgin Day 2 Day plan it would be $20 in cost of calls plus $10.50 for the daily usage fee, in this case the person would be saving at least $9.50 (extra savings from taxes and fees would be even more in savings) a month on average.   In a year that is $114 savings.

The Virgin Mobile Month 2 Month plan is reflecting more of a regular cell phone package month fee of $29.99 a month to have 150 minutes anytime and 150 night and weekend minutes.  They will prompt you when you are notified 15 minutes prior to needing to be adjusted up to the next level at $10 increments.  The unused portion of the $10 level increases will be credited back to your account.  This package does not seem the most cost effective solution for economy minded individuals.  Chances are you are not going to use the allotted minutes efficiently.  If you have a budget plan for capping the calls at a certain dollar amount this it the benefit the plan offers.  The cell phone plans do not alert a user when they have used up there monthly allotted minutes.  Cingular for instance, charges 45 cents a minute once the prearranged minutes are used up.   Remember that on a 30 day month there 43,200 minutes.  How many hours can you talk on the phone a day, you have to sleep 8 hours a day, go to work, eat, and go to school.  If a teenager stayed on the phone for over 3 hours a day (180 minutes) 7 days a week,  that would be 1,260 minutes in just one week!  By limiting the talk time on the cell phone to a fixed amount you will be able to sleep at night knowing that there is not going to be an outrageous telephone bill in the works.


Nokia TF1221PW
cell phone

Wal-Mart shoppers, you too can purchase at the store or online the TracFone Nokia Prepaid Cellular Phone Model, TF1221PW for only $29.92, it comes with 10 minutes of calling time.  The nice part if you donít want to use credit cards and you shop at your favorite store and you can purchase time with pre-paid cell phone calling cards.  You still need to keep the phone active by depositing money into your account every 60 days (90 days with Virgin Mobile) otherwise you will lose the minutes you have paid for in advance.  The cards vary in the time for the deposit and can range from every 60 days all the way up to once a year.  The price per minute varies on this plan.  For instance a TracFone 40-Minute Prepaid Cellular Phone Card cost  $18.92 (Wal-Mart online price), which is 47 cents a minute.  But if you up the purchase a 400 minute card for $78.66 (Wal-Mart online prices) per minute cost is 19.6 cents per minute.  You can get a discount with the TracFone service by doubling your minutes.

Here is how the TracFone can compete with Virgin Mobile. You purchase a card that will get you a deal for double minutes on any future cards purchased.  The card costs $129.99 and you get a 1 year time period with the service (so long as you have a balance with them) plus 300 minutes on the card.  It would be .43 cent a minute for the first 300 minutes, after that time you purchase new cards and you get double the minutes bringing the cost down to future minutes at .10 a minute if you buy the 400 minute cards.  If you plan on using this phone service it would be very comparable to the Virgin Mobile Month 2 Month service.  It would be on average cost $10.83 spent a month for the first card purchase (Virgin was $10.50 a month cost).  The TracFone will show balance remaining so you will know how much time you have left.  It will remind you when the phone must be re-deposited with money to keep the call balance going.  The nice part about this pre-paid phone service is that time can be purchased at over 16,000 retail outlets.  Some of these are OfficeMax, Radio Shack, Target, Amazon, Samís Club, SuperAmerica Gas stations just to name a few. 


TracFone you have to be careful how you purchase time as it can be expensive.  Virgin Mobile offers an attractive plan for not a lot up front cost to gain the discounted rates.  It seems like the TracFone is geared more for people paying with cash and has a larger base of retail stores selling their cards.  TracFone also has an advantage by being widely available for a mobile user to recharge there calling time while on the road and not using up the paid cell phone minutes to do this by phone.  The Virgin Mobile cards can be purchased at RiteAid, Wherehouse, RadioShack, and Target to name a few.

This service will also appeal to those with bad credit and those who do not want to put down a large deposit in advance for a contract service plan.  It also offers people control over how much money they want to spend each month.  Many people do not use the allowed minutes in the plans being offered with the contract service plans they currently are using.  It will be a winner for the teenage cell phone market as parents will be able to control how much the phone bill will be each month.  The trends for pre-paid wireless should become more popular because of the money saving potentials compared to a monthly commitment of a contract plan. 

If you have any comments about this article please email me.

By Nicole Wilson
Best Syndication Staff Writer


Prepaid Cell Phones available to purchase:

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Copyright 2005 Best Syndication                                            Last Updated Saturday, July 10, 2010 09:46 PM