Prepaid cell phones can be a good way to gauge your calling habits, and they are becoming more popular as an alternative to monthly plans.
According to an article in the October issue of Credit Card Management, more and more cellular companies are beginning to emphasize prepaid plans to young adults.
The norm in Western Europe, prepaid plans are gaining steam in the US. Cell phone providers expect this number to rise rapidly and they position pay-as-you-go programs as more flexible and hassle-free alternatives to monthly plans for their younger customers.
Currently, with most prepaid plans, you buy a plastic card to activate minutes to use on your cell phone. It works just like a prepaid calling card.
Credit Card Management explains that most companies also hope to make prepaid minutes available through toll-free numbers, automatic billing, web sites, and even ATMs.
The advantages to prepaid service are that it does not require a credit check, there are no monthly fees or bills, no contracts (and not huge penalty if you want to drop one), and your minutes do not expire after only one month.
There are disadvantages too. In general, you will pay more per minute with a prepaid plan that with a monthly one. You may have to pay more than monthly customers do for extras like text messaging, wireless Internet and long distance.