How to Save Money with Prepaid Cell Phones

by Jamie Simmerman · 13 comments

Having a monthly cell phone bill can take a big bite out of your monthly budget, especially if your phone consumes large amounts of data. When cell service providers switched from unlimited data plans to capped data, many consumers started looking for alternatives.

Prepaid cell phones can save you a bundle — if you know what to look for.

Here are four steps to take when switching to a prepaid cell phone:

1. Drop the Data

The first thing to consider is if you really need data on your cell phone. If you have a tablet or e-reader, you can drop your cell phone data plan and use those to check email on the go. You can also opt for a data block on your phone, only using your home WiFi network to access apps and email.

Even a contract cell phone bill will drop drastically without data charges. If you’re sticking with a carrier plan, ask about putting a data block on your line to keep from accidentally incurring costly pay-as-you-go data charges.

2. Check Your Coverage

Before you select a prepaid phone, you’ll need to determine which band has coverage in your area: GSM or CDMA. For example, if you’re currently with Verizon and have decent signal strength, you’ll want to go with a CDMA phone. Alternatively, AT&T runs on a GSM network.

Each prepaid provider has a coverage map and, usually, an interactive feature on their website that allows you to check coverage at your address. It’s also a good idea to call the company directly to verify coverage before you buy — especially if signal strength looks spotty in your area.

3. Research the Plans

Prepaid cell phone terminology can be a bit confusing. Many plans advertise “unlimited” talk or data, but actually include a preset data cap per month. After you exceed this preset limit, your data speeds drops drastically, throwing your service back to the stone ages of dial-up connection sluggishness.

Before you choose a plan, you’ll need to determine which plans are truly unlimited, as well as how much data you consume on a monthly basis. You can keep your current cell phone number, and many companies will waive activation fees if you ask. You also might want to invest in cell phone insurance to cover damage to your phone.

If you’re switching to a no-contract carrier, you should plan to purchase a new phone. Not all phones can be unlocked, and even if you use a professional unlocking service, you could still end up with a very expensive, non-functioning paperweight of a phone.

4. Choose a Carrier

You can find great deals on prepaid phones by taking advantage of clearance models, special coupons, and sales. But if you choose your preferred carrier and wait patiently for a good deal, you can often get a phone with the features you want at a good price. Popular prepaid carriers are: Boost Mobile, Cricket Wireless, MetroPCS, U.S. Cellular, and Virgin Mobile.

Virgin Mobile has the best deal for data consumers, with unlimited talk, messaging, and data for a mere $55 per month. They also offer deals on no-contract iPhones that make them an attractive choice for many consumers. But, Virgin Mobile doesn’t have signal coverage in all parts of the U.S., so be sure to check coverage areas before you buy.

Boost Mobile is one of the overall best-rated prepaid service providers. If you’re interested in saving money on your initial investment, they offer a good selection of pre-owned phones on their website. For your billing, you can pay by the day or the month. They offer a cool “shrinking payments” discount of $5 off your monthly service when you make regular payments for six months in a row. You can also save more if you set up automatic payments. Lastly, they offer a nice referral program that earns you $25 for every person you refer to the service.

For a comparison of prepaid carriers, check out this PC Magazine post on prepaid cell phone features and ratings.

Do you use a prepaid cell phone? Why or why not?

Money Saving Tip: An incredibly effective way to save more is to reduce your monthly Internet and TV costs. Click here for the current Verizon FiOS promotion codes and promos to see if you can save more money every month from now on.

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{ 13 comments… read them below or add one }

Phil October 17, 2013 at 5:35 am

Great article, but there are several things I disagree with or should have been mentioned.

1. Get the data if you are going to get a smart phone. This is what most people want/need.

2. Realize you are going to pay more for the phone, but this is a good thing. You get to knock of $30-$50 off your bill each month, maybe more. Your phone is not subsidized, so you are not being charged extra each month.

3. If you are looking toward getting an Android phone, look at the Nexus 4 or the new Nexus 5 coming out soon. It is believed Google sells this very powerful prepaid phone without making a profit. It is a great deal. http://news.cnet.com/8301-33620_3-57606245-278/an-appreciation-for-the-nexus-4-the-little-smartphone-that-could/

4. Also, come November check out RepublicWireless.com. They are coming with the Moto X for $300, and the service is only $25 per month!

5. Enjoy NOT getting charged extra high bills for going over your data cap. It is prepaid…so they can’t charge you more. You might get your data throttled or shut off for a day or two, but at least your post-paid phone bill won’t be $300-$400, or more. Be on wifi when you can, download music, podcasts, apps when you are on wifi. Enjoy web surfing, facebook, twitter, and email anytime.

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Kostas October 18, 2013 at 3:02 am

I think some people are put off by the initial outlay on a prepaid phone, but you do need to look at the long term picture! $200 down and $20 a month is still better over the year than $60 a month!

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Phil October 17, 2013 at 5:37 am

By the way, if you are already doing prepaid consider posting your phone and service.

I am using a Nexus 4 on StraightTalk.

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Logan October 17, 2013 at 8:21 am

Thanks for the recommendations, I am currently looking for a prepaid cell phone service and have been researching this extensively lately. I currently have Verizon (iPhone 5), and from what I can tell I am limited to Page Plus if I want to keep my current phone. Does anyone have any other suggestions for prepaid providers if I choose to keep this phone?

I believe I read that Ting is for AT&T phones and they don’t currently offer service for iPhones. Has anyone used Ting? Thanks.

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Bert October 17, 2013 at 8:38 am

If you don’t need a smart phone, the ATT GoPhone is a great choice. The basic phone is $20, and calls are 10 cents a minute. I buy a text package for $4.99/month, and if one renews before the time expires, the minutes and texts remaining will rollover to the next period.

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Linda Bralley April 3, 2014 at 9:52 am

I use an ATT GoPhone….put $100 a year on it (the phone cost $29.99) and I roll over about $25 each year!

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Phil October 17, 2013 at 10:06 am

Logan, I would stick with the CDMA phone you have and PagePlus. I think that is a great deal! What do you not like about it?

I looked into PagePlus a while back, but my understanding was that you could NOT use an iPhone with their service. Has that changed?

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Logan October 17, 2013 at 11:05 am

I believe you are correct, I don’t think Page Plus supports the iPhone yet and neither does Ting. I was using these websites to look for companies that support CDMA cell phones. But I may just have to purchase one of their cell phones. http://en.wikipedia.org/wiki/List_of_United_States_mobile_virtual_network_operators

I will look into the TMobile plan as well. Thanks for your help.

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Phil October 17, 2013 at 10:16 am

Here is how to get TMobile’s $30 plan. Only 100 minutes though.

http://news.cnet.com/8301-33620_3-57587175-278/is-this-the-best-smartphone-plan-ever/

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Julie October 18, 2013 at 4:50 am

My brother uses Ting, and we are hoping to drop our service (with Verizon) and switch to Ting in the next month or so. It seems maybe they are one of the only companies that charges for “actual use.” We are looking to make this move to reduce our cell phone bill even further (currently we pay just $50 for two phones. We don’t have smart phones. We added two lines, at $9.99 each, to my parents’ Verizon family plan. We pay $9.99 for an extra 700 minutes for us all to share. The rest is taxes and fees. We have no data or text messaging.). From our calculations and through checking out their website, it seems we could come in at between $30 and $40 a month for two phones, 500 minutes, and 1000 text messaging (which will feel like luxury to us!) and still no data. Ting has established sort of an a la carte menu of services. But the actual bill at the end of the month is based on “actual use.” If, in any given month, we use fewer minutes or text messages, our bill will be adjusted at a prorated rate. If we happen to use more, same thing.

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Alexa October 19, 2013 at 5:10 pm

I use Republic Wireless it has unlimited text, talk, and data for $19/month. Their current phone is far from fancy but it suits my needs. But, like Phil said next month they’ll have the MotoX. I have no complaints about Republic and you can’t beat the price!

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Sandy April 8, 2014 at 1:55 pm

Does anyone have a prepaid phone that they use for TALK & TEXT ONLY….we want a phone that has NO DATA capability, but isn’t necessarily completely useless or difficult to navigate (works good as far as setting up alarms/ect). Thanks in advance!

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Dan August 14, 2014 at 8:28 am

I retired last April and switched from a company paid smart phone to pre paid Tracphone through HSN. I had previously purchased one for my wife. HSN often has great sale prices on very good, non-smart phones, including enough minutes to last each of us about one year. Our average cost is about $6 per phone for voice and text and we do have data available but don’t use it. We use our tablet and laptop for email and other, with Wifi. In a pinch, we can use the Tracphone for data, if necessary, but we generally find that voice and text are more than enough until we are in Wifi range. It’s a great deal if you don’t need constant internet.

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