Low Minute Users Save With Prepaid Cell Phones

Posted by The Happy Rock on September 28, 2007

The Happy Rockette and I got our first cell phone a little under two years ago. We held out for a long time, because we didn’t want a monthly bill for something that wasn’t a necessity. Yes, I did say it wasn’t a necessity, and it still isn’t for most people. We all survived without cell phones ten years ago, but that is another story.

We got only one phone and the cheapest plan, 300 minutes for $33 a month through Verizon. Recently our battery died on our phone and that got me looking over our usage and contract. I wanted to see through we had made a wise choice, and in hindsight we hadn’t.

We use on average about 80 minutes a month, which with our current plan works out to about 47 cents a minute. Ouch! Even the expensive pre paid plans are cheaper than that.

With our usage being so low I researched prepaid plans, and was quite encouraged. Last time I briefly looked into getting a pre paid cell phone for myself it was ludicrously expensive. It was obvious that the major companies wanted you to buy a month to month plan with a long contract.

My research now reveals that the cheapest and best players in the prepaid cell market were T-Mobile and Virgin Mobile. The rest of the plans had crazy rules or exorbitant prices. Upon closer inspection, Virgin Mobile was getting great reviews and had the best prices.

They have two main minute plans: 18 cent a minute or $6.99 a month and 10 cent a minute. I ran the numbers to see which plan would be the best for monthly minute times of 25 – 300:

The break even point between the two plans was 87 minutes. Anyone who uses over 250 minutes a month is better off with a monthly plan. The takeaway should be clear enough; low minute cell phone users can save a ton of money with pre-paid cell phone plans.

» Filed Under Cell Phones, Frugality, Money Savers

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Comments

9 Responses to “Low Minute Users Save With Prepaid Cell Phones”

Thecpa on September 28th, 2007 6:07 pm

Happy Rock

This is a great post! I am going to review our cell phone bills this weekend to see if our minutes warrant a monthly plan. Thanks for doing all the work for us.

A little secret, we all got along without cell phones for decades. We probably don’t need them now except for that occasional emergency and they are soooo convenient. It’s a trade off.
John Williams (1 comments.) on August 16th, 2008 3:17 pm

This is a good point and it is why my wife stays with Virgin Mobile even though I have a contracct plan with Verizon. I looked at adding her to my plan and making it a family plan, but it just made no sense really. She rarely uses more than a $20 perpaid card over a 2-3 month period. I believe Virgin requires you to buy at least 1 card every 3 months to maintain your service.

I would add that there is a difference between now and the “old days” when no one had cell phones. Back then people used landlines a lot more. Now I know many people who do not even have a landline or if they do they do not use it.

Rather than “cell phones for emergencies”, now the opposite is true. The landline is for emergencies, like when you are home and cell phone battery is dead or service is spotty and you need to make an imprtant call. At least thats how it is for everyone in my peer group ( late 20s-early 30s) who even has a home phone.
Annie (5 comments.) on July 15th, 2009 11:16 pm

Prepaid cell phone plans can be a great deal for many different kinds of people. As with any type of cell phone, it’s important to do your research and compare coverage areas and phone equipment. Without a doubt, if you want to go prepaid, a great plan is out there waiting for you.
Robert O'Barr on October 6th, 2009 3:38 pm

Happy Rock, At 80 minutes per month, you are much better off with T-Mobile (which is what I use). With a $100.00 prepaid t-mobile to go card (you can get for about $90-93 at certain on-line sites), you are given 1000 calling minutes which don’t expire for a year and roll over when you purchase a second $100.00 card. Do the math — at 80 minutes per month you are looking at $8.00 per month which is nearly half the price of Virgin Mobile. If you can find the on-line deals, you are looking at $7.20 – $7.45 per month.
The Happy Rock (336 comments.) on October 8th, 2009 3:50 am

Robert,

Do you have a link to such a prepaid card and the details, I would love to see them. The only thing I find for T-Mobile is their pre-paid page which isn’t a good deal. The $1.00 a day charge is killer.

Thanks for taking the time to write.