Prepaid cell plans may be your best bet

Herb Weisbaum • Profile • E-mail

Is your cell phone bill a budget buster?  Maybe you should switch to a prepaid plan. The savings can be dramatic with pay-as-you-go wireless service.

Jennifer Allison works as a security guard at the Verizon store in downtown Seattle, so she knows all the plans and prices. When she needed to save money, Allison went prepaid.

“And now that I have it, I love it,” she says. Because she only pays for what she uses, Allison feels she has control of her phone bill.

"I can get by on $15 a month for cell phone costs if I need to or nothing for a couple of weeks if I'm really broke. And if I’m flush and want to talk a lot, then I can put as much money as I want into it.”

“Prepaid is coming of age,” says Neil Lindsay, vice president of marketing for Boost Mobile, a wholly-owned subsidiary of Sprint that only sells prepaid service. It no longer has a negative connotation of being just for those who are credit-challenged. “Now it’s more of a choice, rather than something someone needs because they can’t get a contract,” Lindsay tells me.

Wireless companies are responding to the increased demand with more prepaid plans and more sophisticated prepaid phones. “It used to be one-size-fits-all,” says Scott Charleston with Verizon Wireless. “Not any more.”

Prepaid is big over there
In Europe prepaid is already common. It accounts for about a third of the market in France, 66 percent in the United Kingdom and 90 percent in Italy. In the U.S. it’s still a small but expanding part of the wireless business. About 29 million Americans (16 percent of all cell phone users) are on a prepaid plan, but many more could probably save money by going that route.

According to a recent survey from the New Millennium Research Council, a Washington, D.C. think tank, about 25 million cell customers “appear to be good candidates” for this less expensive service because they currently pay for airtime they don’t use. The survey found that more than half of all cell phone customers on a contract don’t use all of their minutes each month.

And prepaid is not just for infrequent users. In its January issue, Consumer Reports did the math and found that bigger talkers can also score sizable savings.

“It’s turning out that the most economical plans are the prepaid ones,” says Mike Gikas, a senior editor at the magazine. “By going prepaid you only pay for what you use.”

The editors say a family with two cell phones that talks about 700 minutes a month could save $100 to $220 a year if they dropped their “family plan” with a one of the major wireless companies and used Virgin Mobile’s prepaid phone service.

Boost Mobile recently introduced an unlimited prepaid calling plan for $50. If you want to limit your bill but have an endless bucket of minutes, this is the plan to choose. You get unlimited nationwide talk and text, web access and walkie-talkie service. Boost uses the Nextel network.

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