5 prepaid cell phone myths busted

The phrase “prepaid cell phone” conjures up images of cheap outdated phones with terrible call reception. However, that is changing as prepaid carriers add low-cost, flexible calling plans and the latest smartphone models to their offering. Here are five prepaid phone myths debunked.

Myth 1: Prepaid cell phone plans cost more than contract-based cell phone plans.
It’s a common misconception that pay as you go cell phone plans cost more than postpaid plans. According to the New York Times, prepaid phone plans can “save hundreds of dollars over the course of two years compared to a contract plan.”

The Times estimates that if you buy an iPhone on a prepaid plan with Virgin Mobile, you will pay approximately $1370 over two years (including the cost of the phone.) On the other hand, an iPhone on a 2-year contract with AT&T would typically cost at least $2,360.

So what’s the catch? Why aren’t consumers lining up to buy prepaid phones? Sticker shock! Most prepaid plans do not subsidize the price of a cell phone, requiring you to pay full price. In these tough times, it is not easy to shell out over $500 upfront for a smartphone. (Although not all no-contract phones cost huge dollars. Best Buy carries a number of Android smartphones for under $99.)

But it’s true, prepaid mobile phones do save you money in the long-run. You control your spending because you only pay for what you use. There’s no long-term contract to sign, no activation fee, hidden charges or termination fee.

Most prepaid carriers also offer flat-rate monthly plans that are low-cost and affordable.   Virgin Mobile, for instance, charges only $35 a month for unlimited data, messaging, and 300 anytime minutes.  If you need more, their $45 a month plan provides the same unlimited options with 1200 minutes.  The great thing is you can change month to month to see what works best for your talk needs.

Myth 2: Prepaid plans offer limited data options.
Data options are readily available with prepaid carriers. Cricket, Virgin Mobile, and Boost Mobile offer unlimited monthly plans for a flat-rate as low as $50, which include unlimited talk, text, and data. The unlimited data pricing is applicable only for feature phones. Smartphone users need to pay an add-on price for data.

Myth 3: Prepaid carriers offer outdated cell phone models.
Not true! Going prepaid does not mean that you have to settle for an antiquated model with outdated features. Prepaid carriers have added both Android and iOS smartphones to the mix. The iPhone S is now available with no contract on Virgin Mobile, while Boost Mobile offers the HTC EVO Design 4G.

Myth 4: Prepaid cellular coverage is poor and unreliable.

In reality, prepaid services rely on the networks of major wireless providers to carry their signal, offering the same coverage and data speeds. For example, Jitterbug uses the Verizon Wireless network, Boost Mobile uses the Sprint network, and TracFone Wireless uses a combination of AT&T, T-Mobile, and Verizon Wireless networks.

Myth 5: Prepaid phones are good only for people who rarely make calls.
Prepaid phones are no longer just meant for people with bad credit or teenagers. Prepaid carriers have introduced a variety of models, plans, and pricing that make them a great option for anyone who wants flexibility with their cell phone usage and would like to save money on their phone bill.

Related:
Prepaid Cell Phones
TracFone Prepaid Phones
Cricket Prepaid Phones
Virgin Mobile Prepaid Phones
Boost Mobile Prepaid Phones

38 Comments

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  1. i am looking for a go pone,tracfone , ect.which i can use for emergency…where i can buy minuets, activate the phone, and have the minuets available when i need them, and not loose them…thank you

  2. My wife recieved a text on her phone saying she had won a Bestbuy gift card for $1000 and to go to an email address at besybuy rewards.We are concerned aboit its validity and wanted to know if there was such a promotion. She had not signed up anywhere for the program

    • Hi Danny,

      It’s a known phishing scam. Please do not give them any personal information.

      Thanks,

      Alex
      Social Media Specialist – Best Buy

    • …………………………………………………………………….
      SCAM!!!!!!!!!!!!!!!!!

  3. Buying aa “unlocked” mobile phone. Say if I like Boost Mobile service and I happen to find a Motorola – DROID Pro XT610 Mobile Phone (unlocked) that I would like to purchase. Will boost let me activate phone and use their service ?/?/ I am confused to what “unlocked” means to me the consumer.

    • Hi Misty,

      Unlocked mobile phones are not bound to a specific cellular service provider, such as AT&T or Verizon. Unlocked phones can be used throughout the United States and internationally on a number of different cellular service providers. This is why unlocked phones are especially useful and popular for people who frequently travel overseas. They work with numerous no-contract providers that offer various price ranges and talk/text/data plan choices.

      Here’s a little more info from our blog: http://bestbuymobile.com/2012/10/29/is-an-unlocked-phone-right-for-me/

      Thanks for asking!

  4. Chandni, Most of the points you bring up are good. But i would disagree with the statement that the coverage is the same as the contract clients.
    Like data on a computer network there is a QoS (Quality of Service) limit on pre-paid over post-paid devices on these networks.
    For example, during major events, like New Years night. If you are in Times Square NY and have a contract phone from Sprint and a Prepaid phone from Virgin Mobile, you can believe that the Sprint phone has priority on the network over the Virgin mobile phone.
    You will get a message stating that all circuit are busy and to try your call again. It’s just a simple matter of QoS and Priority to their contract customers.
    Also, Post paid phones have a much more updated, reliable and robust PRL (Preferred Roaming List) to work from unlike their affiliated prepaid companies.

  5. Well actually it also depends on person’s usage. If he/she is too frequently using these phones then it will definitely cost more than contract phones.

  6. I’m looking through buy one for my daughter for an MP3 player. The only Android MP3 player I can find in Canada is a $200 Sony. For $89 I can buy a phone and never buy minutes for it! Plus, I do have that option if I do need it in the future!

  7. I advice everybody to stay away from tracfone they are a ripoff they charge like 30 cents a minute for the $20 card stay away from it

  8. So my sister just got the iPhone 5 and have me here iphone 4 but i don’t want to get a contract with AT&T is it possible for me to just get a prepaid SIM card and put it in the iPhone with out any problems?

  9. @tom What seems like a ripoff first can actually be a decent deal. Say you are an “average” phone user. Maybe you figure you can cut back by using free online services or just cut back altogether to 200 minutes of phone talk time and 600 messages a month. Next, you buy a phone such as the LG 840G (a $45 find on Amazon w/ free shipping) – it’s the bleeding edge of last generation, feature phones with some smartphone-like capabilities, and, more importantly, Triple Minutes for Life (the cheapest TMFL phones are around $13 on Amazon). You buy the 1500 minute plan and use a 200 minute bonus code after doing a bit of research. So, for $220 + $45 (phone, taxes, and minutes for one year) you get : 1500 x 3 (TMFL applied to the most expensive year card – available online for $200 + $20 tax) + 200 = 4700 minutes / 12 months = ~392 minutes. That’s 200 minutes of talk time plus 192 / $0.30 (text messages cost $0.30 units/dollars) = 640 text messages. So, for 640 text messages a month and 200 talk minutes, you pay $265 TOTAL. No hidden fees, taxes included, etc. If you wanted to lower the total, like I said before, there are cheaper phones (some for $12) that include TMFL. NO, I am not a Tracfone employee, etc. I just did my research (just purchased above results yesterday) and am sharing with you. The bonus minutes codes can be found online. Be sure to A. Buy everything online to save on price and B. Redeem your minutes from a computer as you get unlimited retries for the bonus codes – I tried about 7 or 8 before the codes were valid for my phone. Enjoy!

  10. It is a true statement that pre-paid carriers only offer outdated phones. When post-paid offers a Galaxy S4, for example, pre-paid only offers the Galaxy S2 or S3.

    With T-Mobile pre-paid, there is no availability of usage information online, so you have no way of detecting fraudulent recurring charges or incorrect usage information. All you can see is how many minutes you have left.

    With T-Mobile pre-paid, there is no option to auto-refill the account when the balance drops below a certain level. You can only have a fixed amount per week, month, etc.

    • @Mark,
      This is true if you go to the store. Ebay has all the current phones for pre-pay services. Buy an unlocked phone and a sim card and you too….can have a updated fresh phone straight from China!
      You can monitor all call/text usage…not online but within the phone. Guess what?!!!! Fraudulent recurring charges are really in the form of hidden fees and taxes that phone companies are stealing from you. They have service fees for their service fees!
      Buy an unlimited card and never run out of minutes or data…or go online and sign up for auto refill when your service end date ends.

      • @rarelyo,
        I’m on Virgin Mobile these days, and they claim that only phones bought directly from them will work. They don’t accept unlocked phones on their network somehow.

  11. If I have a verizon postpaid LTE phone, can I get a prepaid SIM to set up a prepaid plan for it?

  12. I would say yes you can but I’m not a expert. I don’t know if you have a android phone or not but if so it will need flashed and a new never used sim card from Verizon and these are easiest to get from radio shack. If it’s not a android phone it should be no problem. I recommend pagepluscellular.com, I have no affiliation with them just a happy customer. Oh if you have a android phone and need it flashed to page plus look on ebay there are people that can do it without having your phone and they do it remotely hooked up to a PC.
    Let me know how it goes and what you decide.

  13. I would be carefull before buying Virgin Mobile.,I have them now and will soon be dropping them.The service is fine but customer support is almost none existent ,the pricing sounds to good to be true but comes with a few surprises they don’t warn you about.Do some research on line before jumping into it.

  14. Stan, could you be more specific about the surprises you found with Virgin Mobile? I’ve been with them for a couple of months now.

    I’ve found that when I am in an area with a lot of users (outdoor concerts, for example), Sprint users have much better luck getting service and throughput than I do, even though we are on the same network. It has happened often enough that I no longer think it is a coincidence.

  15. If I buy a Virgin Mobile prepaid phone and I call someone who is a Sprint customer with a contract, will I be using my minutes

    • Yes, pre-paid plans do not generally offer free night or weekends or free mobile to mobile calls on the same network or even to others with a plan from the same carrier. If you make heavy use of this, then a pre-paid plan might cost you more unless it includes a much higher monthly allotment of minutes than you are used to needing.

      My Virgin Mobile plan offers unlimited talk and text, so not having those free minutes really isn’t an issue me.

  16. True, virgin uses Sprint, however, dont go out of coverage area w/virgin- they offer no additional service providers, (whereas Sprint has “backup” providers when you go out of coverage w/them). This is why you see Sprint people getting better service, stronger signal.

  17. I have been with VM for almost 2 years now. I only use it primarily for streaming music. I live just outside of Philadelphia. Making phone calls has never been an issue nor any dropped calls. The issue I have been facing recently is that streaming music is terrible. It gets cut off repeatedly. I don’t know if it is saturation with 3G and Sprint not investing in more bandwidth for it or something else. I am willing to give a 4G phone a try when they usually go on sale around the holidays otherwise I’ll be dropping them for someone else.

    Outside of major metropolitans I only have one bar so keep that in mind.

  18. I know Boost mobile and virgin run off sprint…But is Boost better than virgin mobile??

  19. Can yoy get free apps if you get a pre paid smartphone?

    • Yes, you will be able to get free apps on a prepaid smart phone. I have a prepaid galaxy s2 and can get a ton of free apps in the app store.

  20. Virgin mobile – I have almost $50 in the account, and i try making a call and i was told i have to top up. can somebody explain. Shouldnt the money cover the call?

  21. I don abuse the phone, no texting, internet nothing. Only for family purposes. That is why the money is building up. It seems I can reach $100 and still can’t make a call, wht purpose then is having this phone?

  22. Dale are you looking at a discount site for the phone for $89 dollars with no mins? Plus, you can get an (unlocked)upgraded phone for cheaper if you shop around online..Then add the minutes onto it as long as you check with your carrier first to make sure that its compatible to work with your prepaid carrier..Such as verizon,straight talk, t-mobile..etc etc etc

  23. If I purchase an iPhone 5 from Virgin Mobile and I’m going into an area that I know doesn’t have coverage, am I able to insert an AT&T GoPhone sim and have the phone work? Or really any other carriers sim?

  24. My family has two phones from US cellular, one is a Samsung Galaxy S2 & S4. We tried to get Straight Talk but they turned out to be a scam, total lies of hours wasted on the phone with them.
    We like the idea of a much lower monthly bill as some offer and we would like to know if there is one out there that is real, and not a scam.
    Thank you,
    casthree

    • I have had page plus cellular for almost a year and I couldn’t be happier. I purchased a Verizon phone (Motorola razor max) and had it flashed to page plus.
      Page plus uses Verizon towers so the service is fantastic.
      I pay 29.95 a month and get 1200 minutes,3000 texts and 500 mb of data. I don’t stream Pandora or anything like that but I do check email and news and 500 mb is more than enough and if it isn’t you can go to a bigger plan.
      No I don’t work for them,I work in a machine shop I’m just a satisfied customer.

  25. So if I get a Straight Talk or Tracfone plan, which uses the AT&T network, will I get inferior service to an AT&T contract customer? My friend works at an AT&T store and is trying to get my to buy a contract plan from her, but it costs a lot more than Straight Talk does. She said the networks know when a user is on Tracfone, or even Go Phone and give them inferior service. Is that true?

  26. Hey I was wondering if you could take one of your older contract phones and put it on a prepaid plan. If so, who could you do it?

    • Eric,

      Here’s what I found out on Howard’s Forum. Check with your carrier though.

      If it has been activated as a pre-paid for at least 6 months, it can be activated on a post-paid account. This (so I understand) is standard VZW policy on pre-paid phones, so you should have no problems.

      Thanks for checking in.
      Kelly

  27. If there is a phone that used to b on an account that has a back balance can I use it on a prepaid plan from the same company just get a new some card?

  28. I use AT&T’s prepaid calling plan and if I don’t use all the minutes I’ve purchased in the alloted time, they expire. Money / Minutes gone. Is that legal. Gift cards are not allowed to expire so I’m wondering how this is legal.

  29. Can I take a smart phone from virgin mobile and put it on boost mobile