Prepaid Cell Phone Plans

Prepaid cell phone plans are an alternative to cell phone contracts that can drag on up to a couple of years, making you feel like a communication captive. Contracts can severely penalize you for going over the minutes you're allotted, and additional charges for leaving the contract prevent you from leaving, whereas the advantage of prepaid cell phone plans is that you can "pay as you go."

AT&T contract plans might allow you to use rollover minutes, but with a pay-as-you-go plan you can often use a few minutes in one month and a couple hours in the next without hassle. Another advantage is that you don't need a credit card to get a prepaid cell phone plan.

Here's how prepaid cell phone plans work: you buy a specific phone made for prepaid plans and instead of using a credit card, you can buy a phone card and set up an account with an available balance, but you have to add $20 to it every 90 days to keep it active. You get a cell phone number assigned to your phone, which records your account.

When you use minutes, the cost gets deducted from your account, and if you run out of available balance before 90 days, you have to add more credit. If you have some left over at the end of 90 days, you have still have to pay $20 to keep the account active, but the left over balance accumulates so that you don't lose money.

Of course, the prepaid cell phone plan has its downsides. You don't get the advantages that often come with contract plans like free nights and weekends, free same service phone to phone calling or free calls to certain numbers like in the myFaves feature at T Mobile, in which you can choose the 5 numbers you call the most and always call them for free.

Also, the minutes themselves for prepaid cell phone plans are more expensive. Still, if you don't have a credit card or if you don't use your cell phone a lot, you might want to consider getting a prepaid plan instead of the typical contract. Unlike with contracts, there's more flexibility and you can leave the plan by letting your account expire. It all depends on your lifestyle and how you tend to use your cell phone, so balance the pros and cons before you decide which plan is right for you.