What Is a Prepaid Card and Why Would You Get One?

Secured credit cards help build credit, and if you can’t get a regular checking account, try second chance checking. These accounts provide another shot at mainstream banking and its perks. For that reason, a prepaid plan doesn’t necessarily mean settling for limits on how much data you get each month. There are very cheap plans aimed at low-data users, but our picks for the best prepaid phone plans also included unlimited data for a lot less than what you’d pay elsewhere.

  • As you use your prepaid card, the amount of your purchases is deducted from the balance.
  • We may have financial relationships with some of the companies mentioned on this website.
  • If you plan to make calls from another country, however, you probably want to consider other options, like an international prepaid cell phone.
  • That’s especially true when you use a mobile virtual network operator, or MVNO, such as Mint, Metro or Cricket, where your phone service is piggy-backing on another carrier’s network.
  • There also is free roaming in Canada and Mexico, though taxes and fees aren’t included in the sticker price.

All you need to do is dial 011 + the country code + the city code + the phone number. For some countries — like Canada, Puerto Rico or Jamaica — you don’t even need to dial 011. Virgin Mobile charges the international per-minute rate for the country you’re calling plus your standard airtime rate.

In this article, we’ll be discussing prepaid debit cards, which are the most popular type of prepaid card used today. Most cellphone plans throttle data speed after a certain usage amount. For example, AT&T sometimes reduces data speed for different unlimited data plans when customers use more than 22GB or 50GB in one billing period.

A prepaid expense is an expenditure that is paid for in one accounting period, but for which the underlying asset will not be entirely consumed until a future period. Recharging your prepaid SIM card is typically done by purchasing a recharge voucher or top-up card an advantage of a classified balance sheet is that it is easy to see: from your mobile network provider. These vouchers or cards can be found at various retail outlets or online platforms. To recharge, you usually need to scratch off or enter a code from the voucher into your phone, which will add credit to your prepaid SIM card.

Prepaid Phone Plan FAQs

Here are some strengths for each, again based on surveys and reviews. Phone selection remains a differentiator, too, though not as much as it used to be. Postpaid customers at the major carriers can always expect to see the leading flagship available at their wireless provider. Increasingly, though, those same models are available from prepaid providers, too.

  • The content on Money Crashers is for informational and educational purposes only and should not be construed as professional financial advice.
  • If you add $150 to your prepaid debit card, you can only spend up to $150.
  • And if you’re a parent looking to teach their kid how to manage money, a prepaid card can be a good starting point.
  • The same goes for device financing, as there are certainly a few prepaid options that offer this, like Cricket and Google Fi Wireless.
  • Prepaid phone cards can be purchased for any amount of money, and they have a limited number of prepaid minutes available on them for phone calls.
  • When you reload the card, funds will instantly show up on your account balance and can be used immediately.

A prepaid card is a way to make payments and purchases; it can have money loaded onto it. Prepaid debit cards can serve as an alternative to a bank account. And since debit or credit cards can cost more if they overspend, financially and in terms of damaging your credit (for credit cards only), a prepaid card can be a safer bet. Many phone carriers prioritize traffic from postpaid customers, so it’s possible that data rates can be slowed if you’re using a prepaid plan.

Prepaid vs. Postpaid phone service: What’s better for you?

We’re also researching plans from smaller carriers who use the Big Three’s cellular towers to provide their coverage. As smaller carriers usually offer their service at a discount, they make up a majority of the candidates that we consider for best prepaid phone plans. ATT’s GoPhone offers monthly plans ranging from $29.99 to $69.99 with a balance rollover on minutes and nationwide long distance. The cheapest plan provides 200 anytime minutes at 15 cents each, while the most expensive plan offers 650 minutes at 11 cents each with unlimited mobile-to-mobile and night and weekend calling.

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If you want to save money on a tight budget, prepaid carriers might be your best option. But there are still some differences between the two types of service — not to mention advantages and disadvantages that you should consider when looking at what kind of plan to get. For example, the popular prepaid cellphone provider Tello throttles 4G data to 2G speed on unlimited plans after you use 25GB. This is a common practice for prepaid plans, even for unlimited data users. Many prepaid phone providers actually piggyback off the cellular networks from the three major carriers, AT&T, T-Mobile, and Verizon. This enables nationwide access and data speeds that suffice for regular Internet usage and even streaming.

Similar to credit and debit cards, prepaid cards charge a variety of fees. You can expect to incur a card opening fee, monthly usage fee, ATM fee, reload fee and foreign transaction fee with many prepaid cards. The trick to finding a top prepaid plan is to broaden your search beyond the major carriers.

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The businesses might say prepaid cards are a good way to manage your money. First and foremost, it provides flexibility as you can choose the amount of credit you want to load onto the card and tailor it to your usage needs. Additionally, prepaid SIM cards are a great option for travelers as they allow you to easily switch to a local network without having to sign up for a long-term contract.

Unlimited Plus

Your prepaid plan might not be as fast as a top-tier plan from a major provider, but the savings are worth it. There may be exceptions, but on average, prepaid phone plans are almost always cheaper than their contract equivalent. Plus, many prepaid plans don’t charge an activation fee, so you don’t have to worry about an expensive first month.

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After three months at $20, you pay for a full year to keep that low rate. Making international calls from your prepaid cell phone may be easy — if you’re calling from the United States and your prepaid plan offers an international option. If you plan to make calls from another country, however, you probably want to consider other options, like an international prepaid cell phone. Prepaid cards can be used to make purchases, similar to a debit or credit card.

When using a prepaid phone card, you will be using your prepaid minutes from your no-contract phone plan, as well as the time that’s loaded onto the calling card. Sometimes, pay-as-you-go customers pay more for their calls, SMS and data than contract customers. In some cases they are limited in what they can do with their phone – calls to international or premium-rate telephone numbers may be blocked, and they may not be able to roam. Current models being deployed by wireless carriers are capable of setting the price points for all services on an individual basis (via packages), such that higher pricing is a marketing decision. While prepaid cards have similar uses to credit cards and debit cards, they are not the same.

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About the Author : Cédric CARON

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