How Prepaid Cell Phones Work

Prepaid cell phones are a great way to monitor teens' phone usage.
Prepaid cell phones are a great way to monitor teens' phone usage.
©­ Photographer: David Davis | Agency: Dreamstime

If your chatty preteen daughter wants a cell phone but you're dreading huge monthly overage charges, a prepaid cell phone may be for you. It could also come in handy if:

  • you want a no-frills phone for occasional use
  • your credit record is less than stellar
  • you want to look before you leap into a two-year contract

Prepaid phones provide the basic services of regular cell phones. However, there's no long-term contract requirements or overage charges for minutes that exceed the monthly plan. And, signing up is easy. You can find a cheap, prepaid cell phone at retail outlets, electronics or discount stores -- or even through major carriers like AT&T (formerly Cingular), T-Mobile and Verizon, who've added prepaid options to their plan mix.

You'll find that a prepaid cell phone works just like any other, although without a long-term commitment and some of the bells and whistles. You buy a cell phone with a set service (number of minutes usable over a certain number of months). You can make calls or even text and picture message, depending on the phone's features, until you run out of minutes. When that happens, you can buy more minutes immediately or within a time limit. Or you can just stop using the phone.

What are the advantages of prepaid cell phones? How do the calling plans work? And, who are the carriers? Check out the next page to find out more about prepaid cell phones.